Federal Budget 2025–26 to Be Presented in National Assembly Today

ISLAMABAD: Federal Finance Minister Muhammad Aurangzeb is set to present the federal budget for the fiscal year 2025–26 in the National Assembly today (Tuesday), with the total outlay estimated at approximately Rs17.6 trillion — slightly below last year’s Rs18.78 trillion.

The budget session, scheduled to begin at 5 PM, will be chaired by Speaker Raja Pervaiz Ashraf. According to the four-point agenda, the session will open with recitations from the Holy Quran, Hadith, a Naat in praise of the Holy Prophet (PBUH), and the national anthem.

Following the formal opening, and with the Speaker’s permission, Finance Minister Aurangzeb will present the federal budget, alongside key financial documents including the Finance Bill 2025 and related revenue proposals.

Key Budget Figures and Projections

The Federal Board of Revenue (FBR) has been tasked with collecting Rs14.02 trillion in taxes — a notable increase from the revised estimate of Rs12.33 trillion for the outgoing fiscal year. Achieving even the revised target by the end of June 2025, however, poses a significant challenge.

On the non-tax revenue front, the government expects to raise between Rs4 trillion and Rs4.5 trillion. Gross revenue receipts have been projected at Rs19.3 trillion, including the FBR’s Rs14.13 trillion target and Rs5.17 trillion from non-tax sources.

After provincial transfers of Rs8.2 trillion under the NFC Award, the federal government will retain Rs11.07 trillion in net revenue. Federal expenditures are estimated at Rs17.57 trillion, of which Rs16.29 trillion will be current expenditures and Rs1 trillion allocated for the Public Sector Development Programme (PSDP).

Deficit and Financing Needs

The projected fiscal gap — ranging between Rs6 to Rs7 trillion — will need to be bridged through deficit financing. Under the IMF programme, the government is also expecting provinces to generate budget surpluses to help contain the overall fiscal deficit.

Major Spending Areas

Debt Servicing: Rs8.2 trillion has been earmarked for interest payments — slightly down from Rs9.7 trillion last year.
Defence: The defence allocation stands at Rs2.55 trillion.
Pensions: Rs1.05 trillion is budgeted for federal pensions.
Subsidies: Rs1.186 trillion is allocated.
Grants: Rs1.9 trillion will be disbursed in grants.

Salary & Pension Adjustments

The Ministry of Finance has proposed four options for increasing salaries and pensions, ranging from 5% to 12.5%. However, the preferred increase is expected to fall within the 7.5% to 10% range. In addition, a Disparity Reduction Allowance of up to 30% may be granted to employees from grades 1 to 16.

Budget Session Schedule

Speaker Ayaz Sadiq has approved a detailed schedule for parliamentary proceedings related to the budget. The National Assembly will be in recess on June 11 and 12. General debate on the budget will begin on June 13 and continue through June 21. No session is scheduled for June 22.