Govt to unveil Rs17.6tr FY26 budget in National Assembly today

• Federal PSDP fixed at Rs1 trillion.
• Defence budget envisaged at Rs2.55 trillion.
• Salary hike between 7.5% and 10% expected.
  

ISLAMABAD: Federal Minister for Finance Muhammad Aurangzeb will present nearly Rs18 trillion federal budget for the upcoming fiscal year 2025–26 in the National Assembly today ( Tuesday), The News reported.

The budget session will be held under the chairmanship of Speaker Ayaz Sadiq at 5pm. A four-point agenda for the session has been issued, according to which, the session will open with the recitation of the Holy Quran, Hadith, Naat of the Holy Prophet (PBUH), and the national anthem. 

Following this, and with the speaker's permission, FinMin Aurangzeb will present the Federal Budget 2025–26. He will also lay before the House revenue and other related documents, as well as present the Finance Bill 2025.

The upcoming budget is projected at Rs17.6 trillion, slightly lower than last year’s Rs18.78 trillion. The Federal Board of Revenue (FBR) has been assigned a tax collection target of Rs14.02 trillion, compared to revised estimates of Rs12.33 trillion for the outgoing fiscal year.

However, achieving the revised target of Rs12.33 trillion by June 30, 2025, remains a challenge. Amid expectations of a 7.5% to 10% hike in salaries for public sector employees, the Ministry of Finance has prepared four proposals for pay and pension increases, ranging from 5% to 12.5%.

The ministry wants to restrict this increase in the range of 7.5% to 10% in the next budget. Disparity Allowance up to 30% is expected to be provided for grade 1 to 16.

On the revenue side, the FBR’s tax collection target has been envisaged around Rs14.2 trillion while non-tax revenue target might be hovering over Rs4 to Rs4.5 trillion in the next fiscal. 

After providing almost 60% share to the provinces under the federal divisible pool (FDP) under the NFC Award, the provinces might secure Rs8 trillion in the coming budget. So the Centre will be left with the revenues of Rs6 trillion and non-tax revenues of Rs4 or Rs4.5 trillion. 

The government will have to get budget deficit financing of Rs6 to 7 trillion to restrict the deficit within the desired limits. The provinces will have to generate revenue surplus to reduce the overall consolidated budget deficit under the International Monetary Fund (IMF) programme.

The defence budget has been envisaged at Rs2.55 trillion in the coming budget for 2025-26. The markup payments were fixed at Rs8.2 trillion in the next budget, compared to Rs9.7 trillion in the last budget. The pension bill of the federal government is fixed at Rs1.05 trillion, subsidies are Rs1.186 trillion and grants are Rs1.9 trillion.

The federal PSDP has been fixed at Rs1 trillion in the coming budget. Total gross revenue receipts has been envisaged at Rs19.298 trillion with the FBR target of Rs14.131 trillion, the non-tax revenue target of Rs5.167 trillion. The transfer to provinces under the NFC Award is envisaged at Rs8.2 trillion so net revenue receipts of the federal government will be left at Rs11.072 trillion.

Total federal expenditure has been envisaged at Rs17.573 trillion with current expenditure might be standing at Rs16.286 trillion and development expenditure of Rs1 trillion. 

Meanwhile, NA Speaker Sadiq has approved the schedule for the upcoming sessions of the National Assembly regarding the presentation and discussion of the federal budget 2025-26.

According to the schedule, the House will remain in recess on June 11 and 12, after the budget presentation today, and the budget debate will begin on June 13.

Ayaz has said all parliamentary parties in the National Assembly will be given appropriate time to participate in the budget debate in accordance with the Assembly’s rules and procedures. 

The general discussion on the budget will continue until June 21. There will be no sitting of the House on June 22. On June 23, the National Assembly will hold a discussion on the charged expenditures for the fiscal year 2025-26. This will be followed by debates and voting on Demands for Grants and Cut Motions on June 24 and 25. 

The Finance Bill 2025 will be taken up for approval by the National Assembly on June 26, while Supplementary Grants and other related matters will be discussed and voted on June 27.