Pakistan plans to go ahead with the full $1.7 billion World Bank financing programme, even though progress on its first reforms has been slow and the government faces questions over whether it is meeting key policy commitments. Government officials have said there are no plans to abandon the Pakistan World Bank loan. The package is meant to widen the tax base, improve public spending and strengthen financial management across the federal government and all four provinces.
What the programme covers
The programme is called Public Resource for Inclusive Development. It is structured as a set of overlapping phases, which are released in instalments, and the first phase is worth $700 million. Of that, $600 million goes to the federal government and $100 million to Sindh. The World Bank's board approved the federal operation on December 19, 2025, and the programme became effective on May 14, 2026.
An advance disbursement of $164.5 million was made to the federal government on June 29. The World Bank has rated implementation of the federal component as moderately satisfactory in its last two assessments. A $200 million operation for Khyber-Pakhtunkhwa is now being processed, while Balochistan and Punjab are expected to receive financing in the third and fourth phases.
The programme also aims to support agricultural income and property tax reforms, better targeting of electricity subsidies, digital land records and electronic procurement. It would also set up a National Data and Statistics Hub to improve coordination between federal and provincial institutions. The World Bank considers these changes important for economic growth, job creation and reducing rising poverty in Pakistan.
Compliance concerns
Reports say the government has breached one of the programme's conditions twice by raising taxes on imports, first in June and again last month. In the second case, the Economic Coordination Committee, a cabinet committee that handles economic decisions, approved additional customs duties, which are taxes on imported goods, to protect a domestic tyre manufacturer. Reports say this runs against the National Tariff Policy, which the government must implement under its loan agreement.
The National Fiscal Pact is another area under scrutiny in the Pakistan World Bank loan. Under the federal operation, Pakistan has committed to ending federal financing of projects and responsibilities that belong constitutionally to the provinces, following the 18th Amendment. In June 2026, however, the federal government approved Rs87 billion for a project in Sindh, which has raised further questions about compliance.
The World Bank has also listed trade liberalisation, a new National Finance Commission Award, power sector restructuring, greater private sector participation in state-owned enterprises and better social service delivery as essential reforms. Despite the concerns, government officials say the programme will go ahead.
Timeline: what has happened so far
- December 19, 2025: The World Bank board approved the federal government's $600 million operation.
- April 2026: A World Bank report noted that the operation had not yet become effective.
- May 14, 2026: The programme became effective.
- June 2026: The federal government approved Rs87 billion for a project in Sindh.
- June 29, 2026: The federal government received an advance disbursement of $164.5 million.
- Last month: The Economic Coordination Committee approved additional customs duties to protect a domestic tyre manufacturer.
Aasan alfaaz mein
Pakistan World Bank loan ka 1.7 arab dollar ka programme poora karne ka plan hai, lekin ibtidai reforms mein sust raftar aur kuch shartein poori na hone par sawal uth rahe hain. Hukoomat ka kehna hai ke programme chhorne ka koi plan nahi hai. Aam logon ke liye iska matlab hai ke tax ka dayra, bijli ki subsidy aur sarkari kharche ke nizam mein tabdeeli aa sakti hai. Abhi tak sirf 164.5 million dollar ki advance raqam di gayi hai.
