ISLAMABAD – The federal government will present a massive Rs17,600 billion budget for the fiscal year 2025–26 in the National Assembly today. The session will begin at 5 PM under the chairmanship of Speaker Ayaz Sadiq. Earlier, Prime Minister Shehbaz Sharif will lead a federal cabinet meeting at 4 PM to approve the budget draft. Finance Minister Muhammad Aurangzeb will present the budget, which includes nearly Rs2 trillion in new taxes.
The budget aims to increase government revenue and manage the fiscal deficit, which is expected to touch Rs6 trillion. The FBR’s tax collection target has been set at over Rs14 trillion. Additionally, Rs8.5 trillion is allocated for interest payments on debt, and Rs2.55 trillion is set aside for defense. Under the NFC Award, provinces will receive Rs8.3 trillion, while the Public Sector Development Programme (PSDP) is expected to get Rs1 trillion.
Meanwhile, the government plans to raise salaries and pensions of government employees and provide some tax relief. The export target for the year is set at $35.3 billion, while imports are projected at $65.2 billion. The federal revenue target stands at Rs19.3 trillion. The expected economic growth rate is 4.2%, and the current account deficit is forecasted at -0.5% of GDP.
On Monday, Finance Minister Aurangzeb also unveiled the Economic Survey for 2024–25. He stated that GDP grew by 2.7% this year, marking a recovery from last year’s negative growth. He highlighted a strong rise in foreign exchange reserves and a sharp drop in the policy rate from 22% to 11%. He said structural reforms were underway to improve the economy’s base.
Former finance minister Dr Gohar Ejaz also shared his suggestions. He urged the government to focus on industry and exports through a five-year policy. He recommended an interest rate of 6% and an energy rate of 9 cents per unit for industry. He also proposed capping the maximum tax rate for salaried individuals at 20% and limiting super tax to corporations earning above Rs10 billion.