Poverty remains one of the most confronting challenges to Pakistan. Poverty restricts human capabilities, reinforces inequality, weakens social mobility and constrains national development. It is a multidimensional issue and requires more than short-term relief measures. According to the Economic Survey of Pakistan 2025-26, the ratio of poverty is increasing exponentially. The poverty figure at the national level has increased from 21.9% to 28.9% in the current year. Provincial-level poverty estimates indicate that poverty in Punjab, despite its relatively strong economic position and resource base, increased from 16.5% to 23.3%, while in Sindh it plunged from 24.5% to 32.6 %. In the same way, in Khyber Pakhtunkhwa, the poverty rate increased from 28.7% to 35.3%, while in Balochistan, it rose from 41.8% to 47.0%.
The economic survey of 2025-26 in Pakistan also underscores that the number of unemployed persons has increased from 4.5 million to 5.9 million. It reflects that there is a big gap between degree-awarding institutions and market-oriented jobs. The unemployment rate rose from 6.3 percent to 7.1 percent, highlighting the need further to accelerate job creation in line with labor force growth.
Astoundingly, Benazir Income Support Program (BISP) which is the central pillar of Pakistan’s social assistance system has been allotted Rs. 722.9 billion in FY 2026; however, of which Rs. 540.27 billion has been released. Ironically, BISP performs an important humanitarian function in Pakistan and provides essential support to vulnerable households. However, a fundamental question remains in minds whether, the BISP genuinely lift poor households above the poverty line and will it achieve a sustainable economic independence or not? I leave this question for the reader to consider. Surprisingly, a country where millions struggle with inflation, unemployment, inadequate access to basic services, and low wages can prevent vulnerable households from falling even deeper into poverty. At least a middle-class family or marginalized society cannot wait for long-term economic reforms when there is no food on the table tonight.
The figures in the economic survey are deteriorating the life of the common Pakistani. Inflation can further worsen the situation for low-income households because rising prices of energy, food, medicines and transportation disproportionately affect poorer families. Mostly, Pakistani families devote a larger share of their income to essential consumption, which ultimately brings them down in their current livelihood. Inadequate healthcare is yet another soaring issue for low-income classes because this can push vulnerable households into indebtedness and deeper poverty when illness reduces earning capacity and generates substantial medical expenditures.
Social protection policies should be complemented by measures that enhance human capital, expand economic opportunities, and enable vulnerable households to achieve greater financial independence.
These challenges are compounded by rural deprivation, unequal access to markets, limited infrastructure and inadequate digital connectivity. It is believed that poverty in Pakistan has been interconnected with several factors that perpetuate poverty in Pakistan; these include limited access to quality education and market-relevant skills are certain fundamental constraints that have doubled our poverty. Some economists argue that unemployment and underemployment further intensify poverty due to weak industrialization, limited private-sector expansion and insufficient employment opportunities. This leaves substantial segments of the working-age population, particularly the economically vulnerable, in poverty.
What should we do? Should the country adopt the Chinese model of moving its people out of poverty? Over several decades, China substantially reduced extreme poverty through a combination of rapid economic growth, rural development, industrialization, expansion of social protections and targeted interventions. The Chinese model of combining macroeconomic and transformational interventions with household-level intervention provide a comparative case for Pakistan. Chinese model of interventions can consequently be tailored to individual circumstances; education, employment, housing, healthcare, agricultural support and relocation; these are the key determinants that can help Pakistan overcome this menace. Rural Industrialization and manufacturing employment can also create new income opportunities for isolated communities in markets and services.
The country can adopt a more comprehensive and sustainable approach to poverty alleviation by integrating transparent BISP and other social protection mechanisms as essential safety nets, particularly for vulnerable households. Relying solely on BISP and recurring cash transfers is not a sustainable long-term solution to poverty. Rather, social protection policies should be complemented by measures that enhance human capital, expand economic opportunities, and enable vulnerable households to achieve greater financial independence.
Rural industrialization and small enterprises are crucial factors for sustainable employment and income opportunities. Moreover, employable skills and entrepreneurial skills should be integrated with degree-awarding institutions to better align educational with labor market needs to reduce long-term dependence on welfare. A strong digital infrastructure and integration of public service systems can connect citizens with appropriate social protection services. National and international NGOs operating in Pakistan can reduce poverty by creating employment opportunities for the youth, however; for this, the government agencies should oversee them through regulatory mechanisms. Flexibility in foreign remittances are key factors to encourage overseas Pakistan to use formal banking channels to reduce their disincentives associated with existing taxation and regulatory procedures. Finally, the accountability in combating corruption must remain central to Pakistan’s poverty-reducing strategy because it is an unending menace for the country that push the poor into extreme poverty. Misuse of public resources and weak governance in Pakistan undermine economic development and reduce public trust, which ultimately constrain opportunities for inclusive growth.