Federal cabinet approves budget 2025-26

ISLAMABAD: The federal cabinet on Tuesday approved the budgetary proposals for the fiscal year 2025-26.

Prime Minister Shehbaz Sharif chaired the cabinet meeting that discussed the budget allocations for the current fiscal year.

Addressing the meeting, the premier said that the economy was improving with all economic indicators showing positive signs.

He said that the government is going to present the best budget banking on the available resources. 

The premier said that the government is raising the salaries and pensions of serving and retired government employees beyond the available fiscal space.

The prime minister asked cabinet members and ministers to ensure their presence in the National Assembly during the presentation of the budget.

Finance Minister Muhammad Aurangzeb will present a Rs17.6 trillion budget for the fiscal year 2025-26 on Tuesday, with total revenue projected at Rs19.4 trillion and the tax collection target fixed at Rs14.13 trillion.

A major chunk of Rs6.2 trillion is allocated for debt repayments which also reflects a budget deficit.

Government employees are expected to get some relief. A 10 per cent increase in salaries and a 5 per cent to 7.5 per cent hike in pensions have been proposed in the budget.

For employees in Grade 1 to 16, a 30 per cent disparity allowance has been proposed to be merged with the basic pay. It has also been proposed to merge the 2022 ad-hoc allowance with the basic pay of the government employees.

He said that the government had to face several challenges in the last one-and-a-half year. He said that the common man rendered a huge sacrifice to pop up the economy. He said that salaried class paid Rs480 billion in taxes. He said that currently Pakistan is on the cusp of a takeoff position. He said that IT exports have improved exponentially and we have to work for the growth of the economy. .

Shehbaz said, “Recently we defeated our big adversary and with the same passion we will move forward.” He said that it is challenged but not difficult to move forward in the economic sector. Will take Pakistan forward with sheer hardwork

He said that India cannot use water as a weapon and Pakistan will take every step to secure its water rights.