The allocation for Pakistan’s water resources sector under the Public Sector Development Programme (PSDP) for 2026-27 has been reduced to Rs103 billion, marking a decline of Rs30 billion, or 22.6 per cent, from the originally approved allocation of Rs133 billion for the current fiscal year. The proposed allocation is also significantly lower than the Rs179 billion recommended by the Annual Plan Coordination Committee (APCC), representing a shortfall of Rs76 billion, or 42.5 per cent.
Concerns Over Water Security
The reduction comes amid growing concerns over water security, reservoir capacity and irrigation infrastructure requirements, raising questions about the pace of development in the country’s water sector. The government dropped the Diamer Basha dam’s project-power generation facilities worth Rs1.424 trillion from the PSDP 2026-27, despite the APCC recommendation.
APCC Recommendations Ignored
The APCC had recommended an allocation of Rs500 million for setting up the Diamer Basha dam project power generation facilities, worth Rs1.424 trillion, in the upcoming PSDP FY 2026-27. Similarly, the APCC’s proposed allocation of Rs32 billion for two water parts of the DBDP has also been downward revised to Rs14 billion.
Ongoing Projects Funding
In the ongoing projects of the PSDP, Rs10.010 billion has been proposed for the Diamer Basha Dam project dam part, worth Rs479.686 billion, and Rs4 billion for the Diamer Basha Dam project acquisition of land and resettlement, worth Rs174.7 billion.
Total Allocation Breakdown
The total proposed allocation for the Water Resources Ministry is Rs103.086 billion, against the ongoing fiscal year’s originally approved Rs133 billion and the APCC recommended Rs179 billion for the upcoming PSDP. The allocation of Rs103.086 billion consists of Rs51.445 billion in foreign funding and Rs51.641 billion in local component.
