Islamabad (Web Desk): The federal cabinet gave its nod to the budgetary proposals for the fiscal year 2025-26, during a meeting chaired by Prime Minister Shehbaz Sharif.
The session focused on allocations for the current financial year, with the premier highlighting signs of economic stabilization, noting that all key macroeconomic indicators are showing improvement.
He expressed confidence that the government is set to present what he termed the most balanced and resource-conscious budget under prevailing constraints.
PM Shehbaz acknowledged that, despite limited fiscal space, the government has decided to provide financial relief to public sector employees.
He confirmed that salaries and pensions of both serving and retired government personnel will be raised. Specifically, the budget proposes a 10 percent increase in salaries and a pension adjustment ranging from 5 to 7.5%.
For civil servants in Grades 1 to 16, a 30 percent disparity allowance is proposed to be consolidated into the basic salary structure. Additionally, the ad-hoc allowance granted in 2022 is also slated to be merged with the basic pay.
Finance Minister Muhammad Aurangzeb is scheduled to present a Rs17.6 trillion federal budget in the National Assembly.
The government has projected total revenue at Rs19.4 trillion, while the Federal Board of Revenue's tax collection target has been fixed at Rs14.13 trillion.
Debt servicing remains the largest expenditure, with Rs6.2 trillion earmarked for repayments—an allocation that underscores the ongoing fiscal deficit challenge.
PM Shehbaz urged cabinet members and ministers to ensure their presence during the budget presentation in Parliament.
Reflecting on the past 18 months, he said the government had navigated through several economic and structural challenges, crediting the resilience and sacrifices of the general public—particularly the salaried class, which contributed Rs480 billion in income tax during this period.
He emphasized that Pakistan stands at the brink of economic recovery, driven in part by substantial growth in IT exports.
PM Shehbaz reiterated the need for collective national effort and persistent dedication to advance economic progress.
He remarked that, although challenges remain, they are not insurmountable.
In a broader geopolitical context, he stated firmly that Pakistan will not allow India to weaponize water and that every necessary measure will be taken to safeguard the country’s water rights.
Recalling a recent significant political or strategic victory, PM Shehbaz stated that Pakistan would continue its forward momentum with renewed resolve and hard work.