“You can’t get rid of poverty by giving people money.“ P.J. O’Rourke

“You can’t get rid of poverty by giving people money.“

Pakistan’s 2026–27 federal budget sends a mixed signal about how the country wants to fight poverty. On the one hand, the government has increased the Benazir Income Support Programme (BISP) to Rs 838 billion, up from Rs 716 billion last year. That is a rise of about 17%, and the programme is expected to support around 12 million families. On the other hand, education and skills still receive a very small share of public money.

Federal education spending is only around Rs 118 billion in current expenditure, while development spending for education under PSDP is about Rs 82.3 billion. Pakistan allocated roughly 0.8% of GDP to education, which is a far too low figure for a country to achieve long-term progress. The aid-centric priorities are not guaranteed future development, which is the main problem the government has to focus on. The real investment areas are education, vocational training, and employment. These remove poverty from Pakistan. After 17 years of BISP, poverty is still deeply rooted. That is why Pakistan needs to move away from dependence on cash transfers and begin investing more seriously in human capability.

The Budget’s Stark Priorities

The budget makes the government’s priorities very clear. BISP has become one of the largest social protection programmes in the country, and the latest increase shows that the state wants to expand direct support to poor households. This is understandable. In Pakistan, many families are facing harsh economic conditions because of inflation, low income, and unstable economic development. It provides a small relief to those families in this vulnerable situation.

However, the main challenge is maintaining policy balance between relief and development. Welfare spending is increased by the government, but investment in skill development remains limited, giving less attention and bringing fewer changes.........

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