The World Bank’s latest South Asia development report outlines key reforms for Pakistan, focusing on enhancing tax collection, modernizing irrigation, and linking energy subsidies to social protection programs.

The report also stresses improvements in agriculture and social sectors to ensure sustainable growth.

The World Bank emphasizes that Pakistan needs to strengthen its tax system to increase revenue. Linking electricity and gas subsidies to the Benazir Income Support Program can help reduce misallocation, cut financial losses, and curb circular debt.

The report notes that redirecting fuel subsidies toward social protection programs could support vulnerable populations while ensuring fiscal stability.

Pakistan faces severe water shortages, with inefficient irrigation and agricultural practices causing major wastage. Modern irrigation projects in Punjab have demonstrated that water usage can be reduced by 57%, while crop yields can rise by 14–31%.

However, the report warns that groundwater resources are depleting rapidly across South Asia, highlighting the need for sustainable water management and long-term agricultural reforms.

Environmental and social measures

The World Bank recommends measures to discourage pollution as a way to improve revenue collection. Additionally, the report highlights ongoing reforms in social sectors, including establishing a climate risk facility to support small businesses affected by floods.

Such initiatives aim to strengthen resilience to climate risks while promoting inclusive economic growth.