The Government of Pakistan is set to present the federal budget 2025-26 in the National Assembly today, outlining a fiscal plan with a total outlay of Rs. 17,600 billion. The budget comes amid growing economic challenges, with a focus on stabilizing public finances, increasing revenue collection, and providing relief to salaried and retired individuals.
Compared to the federal budget 2024-25, which stood at Rs. 18,700 billion, the new budget reflects a tighter spending framework. The federal budget today is expected to target Rs. 14,200 billion in tax revenue, while non-tax revenue is projected at Rs. 4,500 billion.
Salary and Pension Adjustments Expected
Sources indicate that government employees may see a salary increase of 7.5% to 10%, while pensions could rise by 5% to 12.5%. A 30% disparity allowance for employees from Grade 1 to 16 is also under consideration to address wage gaps across departments.
Major Allocations in Federal Budget 2025
According to budget documents and official leaks, the following allocations are proposed in the federal budget 2025-26:
- Defense Expenditure: Rs. 2,550 billion
- Debt Servicing: Rs. 8,200 billion
- Pensions: Rs. 1,000 billion
- Subsidies: Rs. 1,186 billion
- Grants: Rs. 1,900 billion
- Development Budget (PSDP): Rs. 1,000 billion
- Education: Rs. 13.58 billion
- Health: Rs. 14.30 billion
The budget also projects total federal expenditures at Rs. 17,573 billion, with current expenditures estimated at Rs. 16,286 billion.
Provincial Transfers and Deficit Projections
Under the NFC Award, nearly Rs. 8,000 billion is expected to be transferred to provinces — roughly 60% of the divisible pool — leaving the federal government with around Rs. 6,000 billion in net revenue. The budget deficit for FY2025-26 is projected to range between Rs. 6,200 billion to Rs. 7,000 billion.
Macroeconomic Targets Set for FY2025-26
The federal budget 2025 sets key economic goals, including:
- GDP Growth Target: 4.2%
- Inflation Rate: 7.5%
- Export Target: $35 billion
- Import Target: $65 billion
- Remittances: $39.43 billion
Sectoral growth targets include 4.5% for agriculture, 4.3% for industry, and 4% for the services sector, reflecting a balanced approach toward economic revival and structural reforms.
As the federal budget today is laid before the House, economists, business leaders, and the general public await further details on taxation measures, development priorities, and strategies to ensure sustainable growth in FY2025-26.
