Pakistan’s federal budget for the fiscal year 2025-26 has been unveiled, and like every year, it brings a mix of expectations and questions. While the government claims it is a pro-growth and investment-friendly budget, the real question remains: how much of this budget translates into actual relief for the common citizen?
The total outlay of the budget stands at Rs. 17.57 trillion, which is 7% less than the previous year. On paper, this might seem like a cut in spending, but the government asserts it is focusing on reducing administrative expenses while increasing developmental efficiency.
Tax Relief for Salaried Class
A significant positive step is the continuation of income tax exemption on annual salaries up to Rs. 1.2 million. Whether a person is a filer or non-filer, if their monthly income is up to Rs. 100,000, they are not liable to pay any income tax. For the salaried class, especially those in lower and middle-income brackets, this comes as much-needed breathing room.
Additionally, the corporate and salaried sectors have been offered certain tax reliefs, while efforts are being made to expand the tax net by including retailers, freelancers, and small business owners—sectors that have remained largely undocumented in the past.
Interest Rate and Inflation
The government has brought the policy interest rate down to 11% to encourage borrowing and investment. It also claims that inflation will drop from 26% to 4.7%, though market realities and rising prices of essentials like flour, oil, and vegetables may challenge this optimism.
Green Economy and Renewable Energy
In an encouraging move, the government has allocated Rs. 253 billion for energy reforms, focusing on solar, wind, and reducing line losses. It also plans to raise $700 million through Green Sukuk Bonds. These steps show a commitment to environmental sustainability—an area often ignored in previous budgets.
Agriculture Support
The budget allocates Rs. 5 billion under the “Kisan Package” to support farmers, especially small-scale ones. Although this amount may seem modest in the face of rising fertilizer and fuel costs, it’s still a step in the right direction.
Technology and Youth Empowerment
The IT sector has been given a prominent role, with Rs. 79 billion allocated for its development. A new IT Park is proposed in Karachi, which, if implemented efficiently, can become a major source of employment and export revenue for Pakistan’s youth.
Development Projects
The Public Sector Development Program (PSDP) includes 106 priority projects involving roads, dams, urban planning, and water management. While the overall development budget has been constrained due to fiscal tightening, its focus on long-term infrastructure remains.
Education and Health
Although the government has claimed to increase spending on education and healthcare, detailed figures remain unclear. Nonetheless, the acknowledgment of these sectors as priorities is a positive sign.
Conclusion
On balance, Budget 2025-26 appears to be a well-intentioned attempt to stabilize the economy, broaden the tax base, and encourage sustainable growth. However, the real challenge lies not in drafting the budget but in its execution. Transparency, timely implementation, and accountability will determine whether this budget brings meaningful change or remains just another political promise.
Ultimately, a budget is not just numbers—it’s a roadmap for human welfare. And in that light, the coming months will reveal whether the promises of Budget 2025-26 can turn into public trust and prosperity.
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