The National Assembly session commenced on Tuesday at 5 PM, with Finance Minister Muhammad Aurangzeb outlining the federal budget for the fiscal year 2025-26. Prime Minister Shehbaz Sharif was also present to observe the proceedings.
Minister Aurangzeb presented a budget totalling Rs17.573 trillion, detailing objectives such as achieving Rs14.13 trillion in revenue collection by the FBR and a nearly 19% rise in defence spending, bringing it to Rs2.55 trillion.
The budget proposal includes a Rs1 trillion Public Sector Development Program (PSDP) and outlines a salary and pension increase of 7.5-10% aimed at providing support to public servants.
Following the budget presentation, the Assembly will adjourn on June 11 and 12, with discussions set to resume on June 13 and continue until June 21. Additional sessions are planned for late June to address expenditures and approvals.
Pakistan targets 4.2pc growth
Announcing the government’s plan to create a “competitive economy”, Aurangzeb said that economic growth in the upcoming fiscal year was expected to remain 4.2pc.
Pakistan’s economy is showing signs of gradual recovery, with improvements in key sectors such as manufacturing, agriculture, and services. The government has set an ambitious growth target for the upcoming fiscal year, focusing on economic stability, investment incentives, and inflation control.
Efforts are also being made to strengthen exports, encourage foreign investment, and enhance industrial productivity, aiming to create a more resilient financial outlook. While challenges remain, policymakers are optimistic about long-term economic growth and sustainable development.
Regarding the fiscal deficit, the government aims for a lower target of 3.9pc of the GDP — or Rs5,037bn — from last fiscal year’s target of 5.9pc. The primary surplus would be targeted at 2.4pc of the GDP.
Key Highlights of Federal Budget 2025-26:
- Total Federal Budget Size: Rs 17,573 billion
- FBR Tax Revenue Target: Rs 14,131 billion
- Non-Tax Revenue Target: Rs 5,147 billion
- Estimated Total Revenue: Rs 19,278 billion
- Provincial Share: Rs 8,206 billion
- Interest Payments on Loans: Rs 8,207 billion
- Defence Budget Allocation: Rs 2,550 billion
- Grants and Subsidies: Rs 1,928 billion
- Pension Allocation: Rs 1,055 billion
- Civil Government Expenses: Rs 971 billion
- Emergency Fund Allocation: Rs 389 billion
- Public Sector Development Programme (PSDP): Rs 1,000 billion
- Federal Budget Deficit: Rs 6,105 billion
Target for current account deficit fixed at $2.1bn
The annual plan for fiscal year 2025–26 sets key economic targets, including a $2.1 billion current account deficit, which is projected to remain at 0.50% of GDP.
Exports of goods are targeted at $35.3 billion, while imports are expected to reach $65.2 billion. Additionally, services exports have been set at $9.6 billion.
Remittances for the upcoming fiscal year are forecasted to total $39.4 billion, according to the official document.
Govt earmarks Rs 90,225.783 million for various ongoing schemes of the power sector
The government has allocated an amount of Rs 90,225.783 million for various ongoing schemes of power sector in annual public sector development programme (PSDP) for year 2025-26.
According to the budgetary document released here Tuesday, for ongoing schemes, a sum of Rs 10,970 million has been earmarked for Evacuation of power from 2160MW DASU HPP Stage-l,Rs 5,000 million for 220kV Dharki – Rahim Yar Khan -Bhawalpur D/C T/L, Rs 5,000 million for 765/500/220/132 kV Islamabad West Grid Station, Rs 4440.658 for 500kV Allama Iqbal Industrial City for 600MW Demand of the Special Economic Zone in the FIEDMC area and Rs 4000 million for Interconnection of Isolated Makran Network at Basima via Nag G/Station from Panjgoor G/Station (QESCO).
Similarly, Rs 4,250 for 2X660 Installation of coal fired power plant Jamshoro, Rs 4,000 million for Extension and Augmentation of existing 500kV and 220kV Grid Stations (New) Now: Addition & Augmentation of 500kV and 220kV Transformers at the Existing Grid Station for Removal of NTDC System Constraints, Rs 3,150 million for Electricity Distribution Efficiency Improvement Project (EDEIP), Component IV, Rs 3000 for 220kV Mirpur Khas G/S alongwith allied T/Ls, Rs 3,000 million for 500kV HVDC Transmission System between Tajikstan and Pakistan for Central Asia-South Asia Transmission Interconnection (CASA-1000) and Rs 2500 million for 11 for Enhancement in Transformation Capacity of NTDC System by Extension and Augmentation of Existing Grid Stations.
Govt allocates Rs716 billion for BISP in fiscal year 2025–26 to boost social welfare
The government has allocated Rs716 billion for the Benazir Income Support Program (BISP) for the fiscal year 2025–26, aiming to provide financial assistance to low-income families. This marks a significant commitment to social welfare and poverty alleviation efforts.
Govt allocates Rs 253.2 billion under PSDP for provincial and special area development
The Federal government has allocated Rs 253,230.109 million under the Public Sector Development Programme (PSDP) for ongoing and new development schemes of provinces and special areas in fiscal year of 2025-26.
According to a budgetary document released here on Tuesday, for Punjab, the government has allocated a total of Rs 7,641.836 million for forty-two ongoing projects.
For Sindh, the government has allocated a total of Rs 66282.058 million for nine ongoing schemes in the province.
For Khyber Pakhtunkhwa, the government has allocated a total of Rs 2,608.881 million for eighteen ongoing development schemes in the province.
For Balochistan, the government has allocated a total of Rs 29253.005 million for twenty-six ongoing schemes, out of which Rs 825.000 million has been allocated for seven new schemes in the province.
For the merged districts of KPK, the federal government has allocated Rs 65444.329 for three ongoing schemes.
For Azad Jammu & Kashmir, the federal government has allocated a total of Rs 45,000.000 million for eleven ongoing development schemes.
For Gilgit Baltistan, the federal government has allocated a total of Rs 37,000.000 million for eighteen ongoing development schemes in the province.
Govt earmarks over 39 billion for higher education in PSDP 2025-26
The Federal Government has allocated Rs. 39,488 million under the Public Sector Development Programme (PSDP) for the 128 ongoing and 12 new schemes of the Higher Education Commission (HEC) during the fiscal year 2025-26.
According to the budget document issued here on Tuesday, around Rs.38,488.216 million has been earmarked for the ongoing schemes and Rs 1000 million for the new schemes.
Among the ongoing schemes, an amount of Rs. 500 million is allocated for Award of Allama Muhammad Iqbal 3000 scholarships to Afghan students (Prime Minister’s Directive), while Rs 200 million have been reserved Construction of Academic Block, Shaheed Zulfiqar Ali Bhutto Medical University (SZABMU), Islamabad (Revised).
Similarly, Rs 250 million have been allocated for development of Main Campus, Bacha Khan University, Charsadda and Rs 500 million for development of National University of Medical Sciences (NUMS), Rawalpindi (Revised).
Furthermore, Rs 611 million have been reserved for establishment of Kamyab Jawan Sports Academies (High Performance & Resource Centers) and Youth Olympics – HEC, Rs 558 million for establishment of University of Baltistan at Skardu – (Revised).
An amount of Rs 100 million has also been allocated for Fulbright Scholarship Support Program HEC-USAID (Phase-III), while Rs 2300 million are reserved for Overseas Scholarship for MS/M.Phil leading to Ph.D. in selected fields (Phase III) – HEC (Revised), Rs 3670 million allocated for Ph.D Scholarship Program under Pak-US Knowledge Corridor (Phase-I)-(Revised). It is worth mentioning here that Rs 800 million have been reserved for establishment of Pak-Korea Nutrition Centre (PKNC) to improve Child and Community Nutrition.
Among new schemes, the government has allocated Rs. 50 million reserved for Allama Muhammad Iqbal Scholarships for Bangladesh, Uzbekistan, and Friendly Countries-HEC, Rs 100 million for establishing a campus of Pakistan Institute of Fashion Design at Karachi.Drones
Similarly, Rs 150 million have been earmarked for the University Campus at Muzaffargarh and UVAS Campus Pattoki with Rs 150 million.
Govt cuts income tax for salaried individuals to 2.5% from 5% in budget 2025-26
The government has reduced the income tax rate for salaried individuals from 5% to 2.5% in the new budget for fiscal year 2025–26. This move aims to provide financial relief to the workforce and boost disposable income. It is expected to benefit millions of taxpayers across various income brackets.
Govt to introduce new taxes on digital marketing, online businesses in 2025–26 budget
The government is set to introduce new taxes on digital marketing and online businesses as part of the 2025–26 budget. This move aims to increase revenue from the growing digital economy and bring online enterprises into the formal tax net. The policy is expected to impact freelancers, e-commerce platforms, and digital advertisers
Govt imposes 18% tax on Solar imports, raising costs for the renewable energy sector
The government has introduced an 18% tax on solar imports, a move that could impact the affordability of solar panels and renewable energy projects. Industry experts fear this decision may slow down investment in green energy initiatives, affecting efforts to promote sustainable power sources across the country.
The federal government cabinet on Tuesday approved Rs17, 573 billion budget for the fiscal year 2025-26 with 10 per cent salary hike and, 7% pension increase.
A crucial meeting of the federal cabinet, chaired by Prime Minister Shahbaz Sharif, was held today in Committee Room No. 2 of the Parliament House. During the session, the federal cabinet officially approved the much-anticipated federal budget for the fiscal year 2025-26.
The total size of the federal budget has been set at Rs 17,573 billion, according to budget documents obtained by Bizaniya Pakhtun Digital. The cabinet also endorsed a 6% increase in salaries of government employees and a 7% hike in pensions, aiming to provide relief amid inflationary pressures.
The budget is scheduled to be presented in the National Assembly later today.
This comprehensive budget reflects the government’s attempt to balance economic recovery, development needs, and fiscal discipline while managing debt obligations and defence spending.
Stay tuned for more updates as the budget is formally presented in Parliament.
