“You can’t get rid of poverty by giving people money.“
P.J. O’Rourke
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. The government’s education budget is insufficient to achieve lasting improvement, reflecting its focus on symptoms of poverty rather than the root of it. Therefore, it is essential to note that poverty is not only about low income but also about other factors such as weak education, poor skills, and limited access to employment. If those deeper problems are left unchanged, then cash transfers can only keep families afloat for a while. They cannot create real mobility or dignity.
Why Financial Support Is Not Enough to Reduce Poverty
Financial support is helpful, but it is not the whole answer to poverty. It is necessary, especially during difficult times. But cash alone does not change a person’s future. That is the main weakness of a cash-only strategy. It can reduce immediate hardship, but it does not build skills, improve productivity, or create jobs. If children are still dropping out of school, if vocational centres are weak, and if the job market remains small, then the same families will keep facing the same problems year after year.
Pakistan’s low education spending makes this even worse. The education sector remains underfunded. The global standard suggests 4 to 6 per cent of GDP, and Pakistan spends only 0.8 per cent of GDP on it, which is insufficient funds to improve schools, teacher training, and skill education. As a result, youth lack technical skills to secure stable employment. This low spending creates the cycle of poverty that transfers from generation to generation. Many beneficiary households remain poor even after years of support. This does not mean BISP is useless. It means BISP works best as a safety net, not as a full anti-poverty strategy. It can help people survive, but it cannot by itself help them rise.
Historical and International Lessons: Rejecting Dependency, Building Skills
Other countries have shown that real poverty reduction comes from skills, production, and self-reliance. The former president of Burkina Faso, Thomas Sankara, promoted this development model. According to him, the purpose is to remove dependency, not create one. His message was simple: if someone feeds you, they can also control you. He famously said, “He who feeds you controls you.” That idea still matters today. Sankara’s example shows that a country becomes stronger when it builds its own capacity. The same lesson applies to poverty policy. People need education, training, and the chance to work if they are going to escape poverty in a lasting way.
China offers another important example, prioritising cutting the roots of poverty rather than trimming it. It trained its people, taught skills, grew industries, and created employment. Millions of people were trained and brought into the labour market. That is one reason why poverty fell so sharply over time.
South Korea followed a similar path. It did not become successful through transfers alone. It became successful by developing its people first. Both countries show that skills and productive work create long-term prosperity.
Designing Transfers That Build Capacity
Pakistan does not need to remove BISP. It needs to improve it so that it supports upward mobility instead of only survival. The best approach is a “cash plus” model. That means keeping the cash support but linking it with education, health, or skills development. One efficient policy is to connect cash aid to education, skills training, and healthcare to develop families not dependent on government support.
Another policy approach is to provide an educational stipend to students that helps them to manage daily expenses while completing vocational training. This pushes people to complete training, learn skills, and get stable jobs. This helps poor families that compromise education because of financial needs. Moreover, many institutions are providing skills, but the poverty level is not improving. The reason is that outdated skill training cannot meet the current world demands.
Apart from that, just teaching new skills is not enough unless it connects to practical exposure and practices, which is important to get employment in modern industries. In those places, cash support should be matched with better schools, more teachers, and stronger skills centres. That way, social protection becomes part of a wider development strategy.
Fiscal Reality and Political Economy of Reform
Pakistan does not have unlimited money. Debt payments, security, and infrastructure already take up a large part of the budget. So reform has to be practical. But limited resources do mean no choice. It means the government must spend more wisely. One way to do that is by improving targeting and reducing leakage in BISP. If the programme reaches the right people more effectively, some money can be saved and redirected towards education and training. The government can also work with the private sector and donors to support skills programmes linked to employment.
Reform must also be politically careful. Cutting cash support suddenly would create strong backlash. That is why the government should not frame this as a cut. It should frame it as an upgrade. The message should be clear: Pakistan is not removing support for the poor; it is giving them a path out of poverty. Starting with small pilot projects and scaling gradually would make reform easier to defend.
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The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.
Mahnoor Gujjar is a student of English literature and linguistics at the National University of Modern Languages (NUML), Hyderabad Campus.
