ISLAMABAD: President Asif Ali Zardari has officially approved the Finance Act 2025, giving legal effect to Pakistan’s federal budget for the fiscal year 2025-26 with a total outlay of Rs17.57 trillion.
According to a gazette notification dated June 29, the president signed the act on June 27, enabling its implementation from July 1.
The budget, which was presented by Finance Minister Muhammad Aurangzeb in a heated National Assembly session on June 10, sets a target of 4.2% GDP growth while aiming to bring inflation down to 7.5%.
Despite calls from the opposition to delay the budget’s passage for public consultation, the National Assembly approved it on June 26 after incorporating about half of the finance committees’ recommendations. There were several amendments from opposition parties that were entirely rejected.
Furthermore, the significant allocations in the budget include Rs2.55 trillion for defence, Rs1.06 trillion for pension expenditures, and Rs1.19 trillion in subsidies, particularly for the power sector. In a relief effort, the government has granted a 10% increase in government employees’ salaries and a 7% rise in pensions, along with broad-based tax relief for the salaried class.
In this sense, social protection also sees a boost, with Rs716 billion allocated to the Benazir Income Support Programme (BISP).
The Public Sector Development Programme (PSDP) has been allocated Rs1 trillion, prioritizing high-impact and near-completion projects aligned with the URAAN Pakistan initiative.
Moreover, infrastructure remains a central focus, with Rs35.7 billion earmarked for the Mohmand Dam, Rs32.7 billion for Diamer Bhasha Dam, and Rs3.2 billion for the K-IV water project.
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The agriculture sector is set to receive Rs4 billion for 15 schemes, while the construction industry will benefit from reduced withholding tax on property purchases, reflecting efforts to stimulate economic activity across sectors.
