ISLAMABAD: Finance Minister Muhammad Aurangzeb on Tuesday unveiled a Rs17.57 trillion federal budget for FY2025–26, projecting 4.2% GDP growth, 7.5% inflation, and a 3.9% fiscal deficit. The budget proposes relief for the salaried class, allocates Rs2.55 trillion for defence, and slashes overall federal expenditure by 7%.
Economic Priorities & Tax Measures
The government aims to revitalise growth while maintaining fiscal discipline. The FBR’s tax target is set at Rs14.1 trillion — an 18.7% rise — with Rs5.1 trillion in non-tax revenue. Defence remains a key focus amid regional tensions, while Rs1 trillion is reserved for development, including Rs716 billion for BISP.
Salaried Class & Armed Forces Relief
Aurangzeb announced relief measures for salaried individuals and a special allowance for armed forces officers and personnel, acknowledging their role in countering Indian aggression during the May conflict.
Key Sectoral Allocations
- Defence: Rs2.55tr (↑ from Rs2.12tr)
- Debt Servicing: Rs8.2tr
- Pensions: Rs1.05tr
- Civil Admin: Rs971bn
- Power Subsidies: Rs1.18tr
- Education & Health: Rs39.5bn (HEC), Rs14.3bn (health)
- Agriculture: Rs4.2bn with focus on cotton, livestock, and Green Pakistan
Structural Reforms & Tariff Cuts
Tariff reforms include reducing customs duty slabs to 0%, 5%, 10%, and 15% to enhance export competitiveness. FBR digitalisation, AI-driven audits, and B2B e-invoicing were also highlighted.
Energy, EV Policy & Circular Debt
The circular debt hit Rs2.39tr. A refinancing plan and new EV policy aim to address sustainability and reduce fuel imports. Industrial electricity rates have been slashed by 31%.
