- An enhanced, sustainable funding model is essential if Pakistan is serious about transforming its universities into engines of growth, innovation, social mobility
The Government of Pakistan has announced the federal budget for the fiscal year 2025-26, reflecting the economic challenges and evolving priorities of the country. The budget focuses on stabilizing the economy, with significant allocations for defense and debt servicing, while many development sectors face stagnant or reduced funding. Despite promises to improve social services, the health services budget has been extensively cut, and higher education funding has not kept pace with inflation and growing institutional needs.
It has raised serious concerns about the government priorities in addressing the health challenges of the nation. Despite the growing health issues, including the resurgence of polio, rising dengue cases, and a significant burden of non-communicable diseases, the budget allocation for health services has been reduced by nearly 16% compared to the previous year. This substantial cutback in the health budget sends mixed signals at a time when Pakistan is grappling with multiple health crises and is still recovering from the Covid-19 pandemic economic and social shocks. Reduced funding will likely exacerbate gaps in primary healthcare, hinder disease prevention programs, and strain public hospitals that already struggle with inadequate resources and staffing.
Critics argue that this move contradicts the government repeated pledges to improve healthcare access and outcomes, particularly for the most vulnerable populations. While some reallocations within the health sector may exist, a 16% overall reduction raises red flags about the ability to maintain existing services, let alone expand them.
In light of this development, it is essential for policymakers to reconsider these cuts and explore alternative avenues for funding, including public-private partnerships, international health grants, and improved tax collection. Otherwise, Pakistan risks reversing hard-won progress in public health and further entrenching inequities in healthcare access.
Higher education is another vital sector that has experienced monetary cuts in the budget. Investing in higher education is critical for;
- Sustaining research output
- Attracting and retaining qualified faculty
- Creating skilled workforce aligned with national objectives (e.g. Vision 2025 targets)
- Maintaining equitable access to education and avoiding resorting to fee hikes that burden students
These reductions will negatively impact both ongoing and future projects of the Higher Education Commission (HEC). Since the fiscal year 2017–18, the government has maintained the HEC recurring grant at around PKR 65 billion, allocated to cover university salaries, utilities, and other recurring expenses.
During this time, the number of universities and research centers has grown significantly, from 120 to 156, while inflation, salary hikes exceeding 130%, and doubling operational costs have put immense strain on institutions. Despite these pressures, funding has remained unchanged. This allocation also falls short of HEC demand of a substantial increase to PKR 86 billion; still below the actual needs of universities to sustain effective operations. In short, 2025–26 budget of Pakistan continues the decade-long trend of underfunded higher education.
With inflation and rising salary bills, stagnant funding diminishes the real purchasing power of the budget. Universities report struggles to meet payroll, cover utility costs, and maintain academic quality. The per-student recurring grant has dropped from PKR 67,528 in 2018–19 to PKR 50,956 by 2023–24.
The Federation of All Pakistan Universities Academic Staff Associations (FAPUASA), together with other university staff bodies, had strongly advocated for a much larger allocation of PKR 200 billion, in addition to the requested PKR 86 billion recurring grant, aligning with political manifestoes that call for allocating 5% of GDP to education and at least 2% to higher education. However, if even the PKR 86 billion is not allocated, it seems unrealistic to expect the much higher PKR 200 billion to be considered.
Failure to resolve underfunding threatens to erode universities, diminishing their research potentials, limiting opportunities for deserving students, and undermining their global competitiveness. Therefore, an enhanced, sustainable funding model is essential if Pakistan is serious about transforming its universities into engines of growth, innovation, and social mobility.
The author is a Dean, Faculty of Dentistry, Baqai Medical University