Mansoor Nizamani
The federal government is going to present the budget for the fiscal year 2026–27 in the National Assembly on June 5. As in every year, discussions and debates regarding the budget are underway across the country this time as well. On print media, electronic media, and various social media platforms, the upcoming budget has become a major topic of discussion. Every segment of society is closely watching the government’s upcoming fiscal policy. Government employees are waiting for salary increases, pensioners are hoping for an increase in pensions, farmers are seeking agricultural facilities and relief, while traders and industrialists are expecting tax relaxations and an improved business environment. This budget is being presented at a time when the country is facing both internal and external economic challenges.
According to economic sources, the total size of the federal budget for the fiscal year 2026–27 is expected to remain between Rs. 17.1 trillion and Rs. 17.57 trillion. At first glance, this amount appears very large, but when its distribution is examined, it becomes clear that the government’s fiscal space remains limited. According to economic experts, approximately Rs. 7.824 trillion has been allocated solely for the repayment of loans and interest payments, which constitutes nearly half of the total budget. For many years, Pakistan has remained trapped in a cycle of borrowing to repay previous debts, due to which the required resources for education, health, agriculture, water, infrastructure, and other development sectors could not be adequately provided.
Increasing national revenue is one of the government’s highest priorities. The Federal Board of Revenue (FBR) has been assigned a tax collection target ranging from Rs. 15.267 trillion to Rs. 15.5 trillion during the next fiscal year, which is 14 to 19 percent higher than the current fiscal year’s target. The government is considering imposing new taxes to collect an additional Rs. 400 to 500 billion. Economic experts believe that merely imposing new taxes is not a permanent solution to the problem; preventing tax evasion, expanding the tax net, and introducing administrative reforms are equally important.
An important question here is why Pakistan’s Tax-to-GDP Ratio still remains lower than that of many countries in the region. Experts believe that many sectors of the economy are still outside the tax net, resulting in a heavy tax burden falling on a limited number of sectors and the salaried class. If the tax base is expanded, government revenues could increase significantly, making more resources available for development projects.
The federal government has set a target of 4.1 percent growth in Gross Domestic Product (GDP) for the next fiscal year. If the government succeeds in controlling inflation, some improvement may be seen in the purchasing power of ordinary citizens. However, under current circumstances, the public remains deeply concerned about rising inflation.
This year’s budget is also of special importance to government employees. According to reports, a proposal to merge one of the four ad hoc allowances into the basic salary is under consideration. If approved, it would not only increase the basic salary but would also positively affect future annual increments, pensions, and other financial benefits. In addition, a proposal has emerged to provide some tax relief to employees earning between Rs. 1.2 million and Rs. 2.2 million annually.
Similarly, a proposal to increase the Conveyance Allowance by 100 percent for employees in Grades 1 to 16 is also under consideration. Due to the continuous rise in fuel and transportation costs, employee organizations have been demanding such an increase for a long time. Furthermore, proposals for a 10 to 15 percent increase in salaries and pensions have also surfaced. Although final announcements will only be made at the time of the budget presentation, employees’ expectations are currently linked to these proposals.
Approximately Rs. 2.665 trillion is expected to be allocated for defense expenditures in the budget. Given Pakistan’s sensitive geographical location and regional security requirements, the defense budget has always held significant importance. The government must fulfill its national security responsibilities while also addressing public welfare and development needs. In such circumstances, achieving a balanced allocation among various sectors becomes a major challenge.
Regarding social protection, approximately Rs. 592 billion is expected to be allocated for the Benazir Income Support Programme (BISP). Under current economic conditions, this program has become an important support mechanism for millions of poor and deserving families. Due to the increasing effects of inflation, it has become difficult for low-income groups to meet daily living expenses, making it necessary to further strengthen social protection initiatives. For development sectors, an allocation ranging from Rs. 1,000 billion to Rs. 1,300 billion has been proposed under the Public Sector Development Programme (PSDP). These funds will be spent on roads, bridges, water projects, energy, agriculture, education, health, and projects related to the digital economy. Experts believe that if these projects are implemented transparently, they will not only create new employment opportunities but also contribute to increased economic activity throughout the country.
This year’s budget is also expected to place special emphasis on climate change and environmental protection. Pakistan is among the countries most affected by climate change. After the devastating floods of 2022, awareness has grown stronger regarding the need to allocate permanent resources for environmental protection and disaster risk reduction. The government is considering various proposals related to climate adaptation and reducing disaster risks. The energy sector also remains a major challenge for the government. Rising electricity and gas prices have not only affected ordinary citizens but have also increased production costs for industries. Industrialists argue that expensive energy is reducing the competitiveness of Pakistani products in international markets. They believe that the government should introduce fundamental reforms in the energy sector so that domestic industries can increase exports.
Agriculture is considered the backbone of Pakistan’s economy. A large portion of the country’s population depends directly or indirectly on this sector for employment. Therefore, farmers’ expectations are also linked to the upcoming budget. Agricultural experts state that farmers need affordable fertilizers, quality seeds, agricultural credit, modern technology, and improved irrigation facilities. If greater importance is given to agriculture in this budget, not only could food production increase, but exports could also see significant growth. The country’s education and health sectors also require greater attention. Even today, millions of children in Pakistan remain out of school, while many public hospitals lack basic facilities. Experts emphasize that investment in human resources is essential for the sustainable development of any country.
Young people’s expectations are also tied to this budget. A large proportion of Pakistan’s population consists of youth who are looking for employment opportunities, vocational training, and business prospects. Economic analysts believe that if special loan schemes, vocational training programs, and employment-generating projects are launched for young people, the pace of the country’s economic growth could accelerate.
In conclusion, this upcoming budget, which the Federal Finance Minister is scheduled to present in the National Assembly on June 5, is being closely watched by farmers, youth, laborers, industrialists, traders, the salaried class, and ordinary citizens. That day will reveal how much relief the government can provide to the public and what strategy it will adopt for development and economic stability despite fiscal constraints. A budget is not merely an account of income and expenditures; it is an important and comprehensive document that reflects the country’s economy, government spending, and future policies. It remains to be seen how far this budget will meet public expectations and how effectively it will contribute to leading the country toward economic stability. Only time will tell.
