The paper has tried to review the progress towards EFA goals, MDGs related to education and NEP (2009) objectives and targets pertaining to universal primary education and literacy and to identify issues and challenges. Some progress has been made for achieving universal primary education and literacy targets, however, the pace of progress is very slow and Pakistan has missed most of the targets set under EFA, MDSs and NEP (2009). Pakistan is still facing multifaceted challenges in education sector which include low access to education, low retention and high dropout rates, gender disparity, high adult illiteracy rate, poor quality of education, and poor physical infrastructure. Other influencing factors which hinder the progress towards achieving these goals are low budgetary provision for education in terms of GNP, political interference in administrative affairs, poor governance, poverty, high population growth and lack of proper coordination and monitoring mechanism within provinces and at federal level. The Provincial and area governments lack institutional capacity to plan, manage and monitor education system properly in their respective areas especially after 18th Constitutional Amendment. After devolution, the provinces have allocated a significant portion of their budget for education, however a major chunk of budget is spent on salaries and allowances whereas a meager amount is left for development expenditure. Increasing financing for education especially development budget for primary education, capacity building of education managers and teachers, political support for education, school infrastructure improvement, good quality teaching and learning materials and proper implementation and monitoring mechanism are the key ingredients responsible to produce the desired results.