HEC Budget 2025‑26 Analysis: How a 35% Funding Cut Threatens Pakistan’s Knowledge Economy

Drama isn’t merely in the numbers. Of the revised sum, Rs 38,488 million is strictly reserved for 128 ongoing projects, leaving just Rs 1,000 million to initiate 12 fresh initiatives. Key allocations include:

● Rs 500 million for Allama Muhammad Iqbal Scholarships for Afghan students

● Rs 200 million for an academic block at SZABMU Islamabad

● Rs 250 million toward Bacha Khan University’s main campus

● Rs 500 million for NUMS Rawalpindi upgrades

● Rs 611 million for Kamyab Jawan Sports Academies and Youth Olympics

● Rs 558 million for the University of Baltistan, Skardu

● Rs 100 million for Fulbright Scholarship support (HEC‑USAID Phase III)

● Rs 2,300 million for overseas MS/M.Phil‑to‑Ph.D. scholarships (Phase III)

● Rs 3,670 million for Ph.D. scholarships under the Pak-US Knowledge Corridor

New investments such as scholarships, campus block expansions, and digital-infrastructure projects face severe budget constraints.

Higher Ed Under Strain

HEC’s ability to sustain growth is being squeezed from both ends. While recurring (operational) funding remains flat within a range of Rs 63–66 billion, it has not kept pace with inflation, salary hikes, or increased enrolment, which now approximates 1.95 million students.

Universities are reporting mounting financial pressure. Campuses across Pakistan face delays in building labs, academic blocks, and hostels. Recurring shortfalls also now threaten basic expenditures—salaries and utilities are under strain.

Ripple Effects on Research and Innovation

Slashing HEC’s development funds hits universities where it hurts most—labs decay, hostels remain unfinished, and campus expansions stall. With flat operational budgets stuck at Rs 63–66 billion since 2017—despite 38% inflation and salary hikes—universities are forced to divert development money just to cover salaries and utilities. The result: rising tuition, enrolments caps, and shrinking access.

Research takes a heavy hit—PhD scholarships, faculty grants, and international exchanges freeze, isolating Pakistani academia. Lacking labs and infrastructure, top talent migrates abroad, triggering brain drain.

Financial instability is now a grim reality. Institutions like QAU and Balochistan University struggle to pay salaries, take loans, and cut programs.

These aren’t just budget cuts—they are cuts to Pakistan’s future as a knowledge economy. Reversing them isn’t optional. It’s urgent.

Looming Risks for Pakistan’s Knowledge Economy

HEC leadership has cautioned that unless both development and recurring allocations are enhanced, project momentum will stagnate. The risk: Pakistan’s pursuit of a vibrant, research-driven knowledge economy may falter. Serious consequences lie ahead: compromised educational quality, reduced opportunities for students, and academic institutions sliding into fiscal inertia.

Conclusion:

The FY 2025–26 HEC allocation reveals more than just tightened belts—it signals a crossroads for Pakistan’s higher education. With development funding slashed by 35% and operational budgets frozen amid inflation and rising enrolment, universities are being forced to choose between fulfilling short-term obligations and investing in future capabilities. Laboratories languish, research grants dry up, and flagship infrastructure and scholarship programs are pushed to the backburner. As institutions divert development funds to cover salaries and utilities, equity suffers, tuition rises, and access narrows. Perhaps most alarming is the broader political snapshot: overall federal spending fell by around 7%, suggests that higher education despite its central role in long-term growth—is increasingly treated as expendable in the face of immediate fiscal or geopolitical demands.

If this trend continues, Pakistan risks eroding the foundations of its knowledge economy: research will stagnate, talent will emigrate, and universities may contract or collapse. Reviving HEC’s development and recurring budgets must be treated not as discretionary, but as essential to national progress. Only then can the country ensure its universities remain engines of innovation, inclusion, and global competitiveness.