The National Economic Council (NEC) on Wednesday approved the national development budget and Annual Development Programme for the fiscal year 2026-27, agreeing to cut provincial development allocations by Rs920 billion.

The meeting, chaired by Prime Minister Shehbaz Sharif, was attended by federal ministers and three chief ministers. Punjab Chief Minister Maryam Nawaz participated via video link.

The combined provincial development budget was reduced from Rs3.138 trillion to Rs2.218 trillion.

Punjab bore the steepest cut, with its allocation slashed from Rs1.450 trillion to Rs749 billion.

Sindh’s budget was reduced from Rs816 billion to Rs706 billion, and Khyber Pakhtunkhwa’s from Rs564 billion to Rs455 billion.

Balochistan was exempted from cuts, with its Rs308 billion allocation left intact.

The federal development budget was also trimmed by Rs126 billion.

The meeting reviewed the current year’s Public Sector Investment Programme and received briefings and presentations on provincial ADPs.

Addressing the council, PM Shehbaz said Pakistan had strived to remain on track with the IMF programme despite enormous challenges.

He said job creation, export growth and broader economic improvement were a shared responsibility.

He noted that regional geopolitical tensions had driven up global oil prices, adding that the government had provided Rs128 billion in relief on petroleum costs.

The prime minister said the entire nation — particularly the people of Khyber Pakhtunkhwa and Balochistan — was making sacrifices in the fight against terrorism, and that the menace must be eliminated through national unity.

The council agreed to make public welfare schemes a central part of the national development programme, with priority given to completing projects in education, health, clean water and communications.

Close coordination between federal and provincial bodies was declared essential to achieving development targets.