Key Takeaways from Budget 2025-26

ISLAMABAD – Pakistani government unveiled Budget 2025-26, with focus on fiscal discipline, digital transformation, and targeted social protection.

With focus on stabilizing economy and boosting long-term growth, the budget outlines ambitious targets in tax collection, energy sector reform, and investment promotion.

Key highlights from Budget 2025-26

Economic Indicators

GDP growth projected at 3.9%.
Inflation targeted at 12.3%.
Fiscal deficit capped at 5.5% of GDP.
Tax-to-GDP ratio to rise from 8.8% to 10% through FBR modernization.

Revenue & Taxation

AI-driven systems, digital invoicing, and real-time monitoring to curb tax evasion.
Stricter penalties for non-filers and digital tax on foreign e-commerce platforms.
Enhanced efforts to expand the tax base and increase compliance.

Energy Sector

PKR 389 billion earmarked to reduce circular debt.
Tariff rationalization to ensure competitive electricity pricing.
Expansion of solar and wind energy to reduce reliance on fuel imports.

Oil & Gas Exploration

Offshore bidding rounds launched to improve energy security.
Incentives introduced for tight gas development to attract private sector participation.

Privatization

Accelerated privatization of Pakistan International Airlines (PIA) and power distribution companies (DISCOs).
Divestment of non-strategic state-owned enterprises (SOEs) to reduce fiscal burden.

BISP & Other Welfare Programs

BISP coverage expanded by 15%, prioritizing pregnant and lactating women.
Introduction of financial literacy programs and inflation-indexed federal pensions.
PKR 21 billion allocated for preventive healthcare; 90 hospitals to be upgraded.

Climate and Agriculture

PKR 16 billion dedicated to flood control, water conservation, and climate adaptation.
Green Pakistan Initiative gets PKR 178 billion for climate-smart agriculture and digital subsidy disbursement.

Digital Transformation & IT Exports

E-governance rollout for public service efficiency.
IT exports targeted at $25 billion by 2029, with startup incentives and infrastructure support.

SME & Housing Support

47 billion allocated for SME credit access.
Low-income housing to benefit from subsidized mortgage schemes.

Overseas Pakistanis

Remittance facilitation reforms target $31.3 billion in inflows.
Skill-building programs launched for returning expatriates.

Water Infrastructure

69 billion allocated for dam construction, canal rehabilitation, and urban water projects like K-IV.

Strategic Investments & CPEC

Projects in agriculture, mining, and IT prioritized under the Special Investment Facilitation Council (SIFC).
Continued investment in CPEC infrastructure, including road and rail connectivity.