ISLAMABAD

Pakistan’s information technology sector has received a significantly lower development allocation than requested in the federal budget for FY2026-27, with the government earmarking Rs20 billion for IT projects against a demand of Rs72 billion from the Ministry of IT and Telecommunication.

The funding gap highlights the fiscal constraints facing the government as it seeks to balance economic stabilization measures with investments in digital infrastructure and technology-led growth. The allocation comes amid broader cuts and prioritization across the federal development programme, where ministries and departments have collectively sought funding far exceeding available resources.

Industry stakeholders have expressed concerns that limited funding could slow the pace of key initiatives, including digital connectivity, innovation programs, startup support, e-governance projects, and the expansion of broadband services in underserved areas.

Despite the reduced allocation, officials maintain that strategic IT projects will continue to receive support, with the government aiming to sustain momentum in Pakistan’s digital transformation agenda while operating within tight budgetary limits. The IT sector remains a key pillar of the country’s export growth strategy and digital economy ambitions.

The development comes as Islamabad pursues fiscal discipline under economic reform commitments, forcing policymakers to make difficult choices over public sector spending and development priorities.