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Tuesday, 3 June, 2025 I 6 Zilhaj, 1446
Rs 50.00 | Vol XV No 327 I 48 Pages I Islamabad Edition
FEDERAL GOVT PLANS RS1TR DEVELOPMENT OUTLAY IN FY26, FAR SHORT OF RS3TR DEMAND RS1TR EARMARKED UNDER PSDP AMID IMF-GUIDED REFORMS
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PROFIT
STAFF REPORT
HE federal government plans to allocate Rs1 trillion for development spending under the Public Sector Development Programme (PSDP) in the upcoming fiscal year 2025–26, well below the Rs3 trillion sought by various ministries, according to official budget documents seen by media publication, The News. The Ministry of Finance initially set a development ceiling of Rs921 billion, which was later revised upward to Rs1 trillion. However, this figure remains significantly lower than last year’s original allocation of Rs1.4 trillion, which was revised twice to eventually stand at Rs1.096 trillion. So far, only 54% of the revised FY25 development outlay—equivalent to Rs593 billion—has been utilised during the first 11 months, raising concerns about the pace of project execution. Among the proposed FY26 allocations, the Cabinet Division is expected to receive Rs50.33 billion, making it one of the biggest beneficiaries. Other allocations include Rs1.10 billion for the Board of Investment to support investment promotion, Rs2.78 billion for the Ministry of Climate Change, Rs400 million for the Commerce Division, and Rs200 million for the Communications Division.
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LIMITED FISCAL SPACE COMPELS GOVT TO SHELVE OVER 100 PROJECTS WORTH RS1TR
The Defence Division has been allocated Rs11.55 billion, with an additional Rs1.78 billion for the Defence Production Division. The Establishment Division is likely to receive Rs495 million. The government also plans to continue the controversial Sustainable Development Goals (SDGs) Achievement Programme, widely viewed as a discretionary fund for parliamentarians from treasury benches. In the current year, 71% of its Rs48 billion revised allocation—equivalent to Rs35 billion—has already been spent. The upcoming budget, to be presented by Finance Minister Muhammad Aurangzeb on June 10, is expected to be a reform-heavy, IMF-guided fiscal blueprint aimed at stabilising the economy through fiscal consolidation, development prioritisation, and targeted relief measures. Originally scheduled for June 2, the budget was delayed due to ongoing negotiations with the IMF, particularly around proposals for tax relief for the salaried class. Despite progress in talks and emerging consensus on some relief measures, analysts warn that the government faces an uphill battle in meeting the proposed Rs14.2 trillion revenue target, especially in light of a widening shortfall against the current year’s revised tax collection target of Rs12.33 trillion. According to market estimates by
Govt sets 4.2% GDP growth target for FY26 amid tight development budget: Ahsan Iqbal PROFIT
STAFF REPORT
Minister for Planning and Development Ahsan Iqbal on Monday announced that the government has set a GDP growth target of 4.2% for fiscal year 2025–26, as it unveiled a scaleddown development plan constrained by severe funding limitations. Speaking to the media after the Annual Plan Coordination Committee (APCC) meeting in Islamabad, Iqbal revealed that over 118 projects—collectively worth Rs1 trillion—have been shelved due to the lack of fiscal space in next year’s Public Sector Development Programme (PSDP). “This year’s development budget has been set at Rs1,000 billion. It is not possible to accommodate all ministerial demands,” Iqbal said. “We now have to make tough decisions in the national interest.” The minister said the size of the economy is projected to grow to
Topline Securities and Arif Habib Limited, Pakistan is likely to maintain a pos-
Rs129 trillion next year, with exports targeted at $35 billion. He added that Rs150 billion had been earmarked for the social sector and Rs70 billion for KP’s merged districts. Iqbal stressed that only nationally significant projects would be prioritised, particularly those nearing completion or having foreign funding components. He further urged provincial governments to take greater ownership of local development, noting that “provinces have far more resources than the federation.” Outlining the development roadmap under the ‘Uraan Pakistan’ initiative, the minister said priority projects for FY26 include the Diamer Bhasha Dam, Sukkur-Hyderabad Motorway, the N-25 highway in Balochistan, and the second phase of the Karakoram Highway. He also highlighted enhanced allocations for special regions such as Azad Jammu and Kashmir, GilgitBaltistan, and the tribal districts, reaffirming the government’s intent to ensure balanced regional development.
itive primary balance, aiming for a 1.6% share of GDP in FY26.
Govt plans modest tax relief for salaried class in upcoming budget PROFIT
STAFF REPORT
CEC says ECP may summon prime minister if Islamabad LB elections delayed further ISLAMABAD
NEWS DESK
The Election Commission of Pakistan (ECP) has the authority to summon the prime minister if local body elections are not held in the Islamabad Capital Territory (ICT), Chief Election Commissioner (CEC) Sikandar Sultan Raja said on Monday. Addressing a five-member bench hearing the case on the delay in Punjab’s local government elections, CEC Raja noted that except for Punjab, all provinces have conducted their local body polls. He stressed the embarrassment it would cause Punjab if the ECP had to issue an order on the elections. The commission is prepared to take necessary steps and will not remain passive, he added. CEC Raja emphasized that the ECP could summon the Punjab chief minister and, if needed, the prime minister to ensure elections take place. ECP Secretary Umar Hameed informed the bench that both the Punjab government and the federal government in Islamabad have shown reluctance to conduct local body elections. Punjab’s local governments completed their term on December 31, 2021, but polls have been delayed for three years amid multiple amendments to local government laws. The Punjab minister for Local Government told the commission that legislation for local elections is currently under review by a standing committee and efforts are ongoing to complete the process. The local government bill has been pending in the assembly for over three months, longer than the usual two-month timeframe for approval.
The federal government is set to propose a slight reduction in tax rates for the salaried class in the upcoming budget for the 202526 fiscal year. Under directives from Prime Minister Shehbaz Sharif, the government aims to ease the tax burden on individuals earning regular salaries by lowering tax rates by 1 to 1.5 percentage points, Dawn reported, citing sources. The adjustment, while modest, signals the government’s intention to begin addressing the concerns of the salaried class, who have long faced higher tax rates. According to the Salaried Class Alliance of Pakistan (SCAP), the contribution of salaried individuals to Pakistan’s tax revenue in the 2024-25 fiscal year is expected to be five times higher than that of exporters and retailers. The FBR collected Rs430 billion in income tax from salaried individuals during the first ten months of the fiscal year 2024-25. In a pre-budget meeting held
last week, Finance Minister Muhammad Aurangzeb stated that the government plans to shift the tax burden away from the salaried class and the documented sector. This shift will involve encouraging greater use of digital payments, as part of an ongoing effort to transition the economy towards a cashless system. Aurangzeb suggested that the upcoming budget would introduce measures to promote digital transactions, which would help increase documented business activities and reduce the reliance on cash. During a public address later that week, the finance minister further emphasized that the forthcoming budget would introduce “bold measures” aimed at steering Pakistan’s economy in a more strategic direction. These measures are expected to include steps that not only ease the tax burden but also push for greater financial inclusion through digital solutions. According to a report by The News, Pakistan is nearing an agreement with the International Monetary Fund (IMF) on tax re-
lief for the salaried class, although meeting the ambitious revenue target of Rs14.2 trillion will remain a challenge. The IMF’s approval could provide a relief of Rs56-60 billion for salaried individuals in the next fiscal year. However, to balance the revenue gap caused by these cuts, the FBR will need to introduce compensatory tax measures. The FBR had proposed a 1% tax rate for the first income slab, covering earnings from Rs0.6 million to Rs1.2 million annually, down from the current 5%. If approved, this change would reduce tax liability for individuals earning up to Rs100,000 per month from Rs30,000 to Rs6,000. The IMF has suggested a slightly higher 1.5% tax for this slab, amounting to Rs9,000 in tax for the same earnings. For the higher income slabs, a 2.5% reduction is proposed across all levels, with the highest tax rate dropping from 35% to 32.5%. However, discussions are still ongoing to finalize the exact figures.
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IHC to hear petitions on Al-Qadir Trust verdict as NAB prepares defense ISLAMABAD
STAFF REPORT
The National Accountability Bureau (NAB) has established a legal team to handle the 190 million pound Al-Qadir Trust case against former prime minister and Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan and his wife Bushra Bibi. Deputy Prosecutor General Sardar Muzaffar Abbasi will lead the team, which also includes Special Prosecutors Irfan Ahmad Bhola, Sohail Arif, Rafay Maqsood, and Yasir Salim Rana. The Islamabad High Court (IHC) is scheduled to hear petitions seeking suspension of the sentences awarded to the couple on June 5. An accountability court had sentenced Imran Khan to 14 years and Bushra Bibi to seven years in prison in connection with the case, along with fines.
Pakistani delegates set to visit Russia for lobbying on tensions with India ISLAMABAD
NEWS DESK
Pakistan is dispatching a high-level delegation to Moscow, led by Special Assistant to the Prime Minister on Foreign Affairs Syed Tariq Fatemi, to present Islamabad’s perspective on recent regional developments and advocate for peace through diplomacy. This visit forms part of a wider diplomatic initiative launched by Prime Minister Shehbaz Sharif. In parallel, another multi-party delegation headed by Pakistan Peoples Party Chairman Bilawal Bhutto-Zardari is engaging with Western capitals, including New York, Washington D.C., London, and Brussels. According to Foreign Office spokesperson Shafqat Ali Khan, Fatemi’s delegation will hold discussions with senior Russian officials, think tanks, and media to emphasize Pakistan’s “responsible and peaceful stance” contrasted with India’s “irresponsible and aggressive actions.” The outreach aims to shape international opinion in favour of Pakistan and stress the importance of peace, dialogue, and diplomacy over conflict. The delegation led by Bhutto-Zardari comprises nine members, including political leaders and former diplomats such as Dr Mosaddiq Malik, Senator Sherry Rehman, Hina Rabbani Khar, Engineer Khurram Dastgir Khan, Syed Faisal Ali Sabzwari, Bushra Anjum Butt, former foreign secretary Jalil Abbas Jilani, and Tehmina Janjua. Both delegations plan to engage with government officials, parliamentarians, media, think tanks, and the Pakistani diaspora. Their focus will include urging the international community to adopt a constructive role in fostering stability in South Asia.
FO says India’s hostile statements reflect troubling mindset, urges dialogue ISLAMABAD
STAFF REPORT
Pakistan on Monday condemned recent remarks by Indian leadership as reflecting a mindset prioritizing hostility over peace. The Foreign Office responded to antagonistic statements, including one by the Indian Ministry of External Affairs spokesperson on May 29, asserting talks on
Kashmir would only begin “when Pakistan hands over Azad Jammu and Kashmir.” Foreign Office spokesperson Shafqat Ali Khan said attempts to blame Pakistan for regional instability are divorced from reality. He cited India’s record of aggressive behavior and documented support for terrorist activities within Pakistan, stating these facts cannot be masked by hollow narratives.
Khan reiterated that the Kashmir dispute remains the core issue threatening regional peace and stability. Pakistan will continue to advocate for a just resolution aligned with UN Security Council resolutions and Kashmiri aspirations. He described recent Indian remarks as proof of the futility of jingoism and coercion, stressing India cannot achieve its objectives through threats or force.
Pakistan remains committed to peace and constructive engagement but will defend its sovereignty and territorial integrity against aggression. The spokesperson emphasized that lasting peace demands maturity, restraint, and addressing the root causes of conflict instead of pursuing narrow political gains at the expense of regional harmony.
Govt working to eliminate corruption, lack of transparency: PM ISLAMABAD
STAFF REPORT
Prime Minister Shehbaz Sharif said Monday that institutional reforms are progressing rapidly across all sectors, as part of a broader effort to eliminate corruption and address persistent gaps in transparency. “All government institutions are working tirelessly to eliminate corruption and other deficiencies, such as lack of transparency,” Shehbaz said while chairing a high-level meeting on Federal Board of Revenue (FBR) reforms in Islamabad. The prime minister directed officials to engage internationally recognised audit firms for third-party validation of reforms underway within the FBR to ensure credibility and external accountability. Shehbaz also reviewed the performance
of the Faceless Customs Assessment System, a key initiative launched to minimise human interference in customs processes. He expressed satisfaction, noting that the system had improved revenue collection and significantly reduced clearance times. He reaffirmed that the government’s reform agenda, bolstered by recent economic indicators, is evidence that the country is moving in the right direction. Officials at the meeting briefed the prime minister on the Pakistan Revenue Automation Limited (PRAL) reforms, and announced that a simplified digital tax return system would soon be introduced, including features in Urdu and other local languages to assist the general public. The meeting was attended by Minister for Law and Justice Azam Nazeer Tarar, Minister for Information and Broadcasting
Attaullah Tarar, the FBR Chairman, and other senior officials. Previously, Prime Minister Shehbaz had directed the urgent and effective implementation of ongoing reforms within the FBR, placing particular emphasis on the digitisation and automation of the country’s tax system. In a meeting Shehbaz called for decisive action to rectify what he described as “70 years of mismanagement” in Pakistan’s tax infrastructure. He reiterated that while honest taxpayers and businesses would be fully supported, those involved in evasion would face firm legal consequences without exceptions. Shehbaz also commended the FBR and its enforcement arms for their recent efforts in improving tax revenue, following the rollout of systems such as the Faceless Customs Assessment System.