Addressing the 4th Postgraduate Convocation of the National University of Sciences and Technology (Nust), he said the government was working on a comprehensive plan to raise the literacy level and lay a sound base for higher education.
Musharraf promised that with the rising revenue collection, the government would keep increasing the allocation for education every year.
The President said the increase in allocation from 2.6 percent to 4 percent for the primary level would help put a solid foundation for higher education, as having a weak base with super structure at the highest level will not be sustainable.
To improve educational facilities in the rural areas, he said, it has been decided that army will help the administration in improving existing infrastructure of schools in villages.
He said the government was also looking into harmonising English and Urdu mediums of instruction to end the confusion that prevailed in the country.
Musharraf said the existing system was resulting in students being proficient in one language while not very well versed in the other. "The idea is to teach some subjects in English and some in Urdu in all schools," he said, adding the students would be tested in both the languages.
He said the government was also reviewing the current curricula and syllabi to bring about sectarian harmony and promote affinity and brotherhood in the country.
Listing various initiatives to improve education network in the country, the President said that it has been decided to hand over responsibility of primary and secondary education to the district, those of colleges to the provinces, while the central government would oversee the higher education.
Referring to efforts to focus on higher education, he said the government has increased the budgetary allocation for higher education manifold.
Musharraf said by 2007 the country aims to produce up to 800 PhDs every year targeting to increase this number to 1500 a year by 2010.
The President informed the graduating students that five engineering universities would be set up in the country in collaboration with France, Germany, Austria and South Korea.
Three technological universities were also being and would take about five years to come on ground, he added.
"In 10 to 15 years, we will be proud of increasing literacy level, increasing quality of primary education and even will be able to provide education to other Muslim countries in higher education," Musharraf said.
The President praised the standard of education at the Nust, saying it has produced professionals of international standard in the field of engineering, medical and management sciences.
Earlier, he awarded President's Gold Medals among the top achievers as well as the best teacher and best research scholar.