Federal Minister for Finance Muhammad Aurangzeb is set to unveil the federal budget for the fiscal year 2025–26, estimated at nearly Rs. 18 trillion, in the National Assembly today (Tuesday), according to The News. The budget session will commence at 5 PM under the chairmanship of Speaker Ayaz Sadiq.
As per the four-point agenda issued for the session, proceedings will open with the recitation of the Holy Quran, Hadith, Naat of the Holy Prophet (PBUH), followed by the national anthem. After formalities, Finance Minister Aurangzeb will present the Federal Budget 2025–26, along with the Finance Bill 2025 and related documents.
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The proposed budget outlay stands at Rs17.6 trillion, slightly lower than the previous fiscal year’s Rs18.78 trillion. The Federal Board of Revenue (FBR) has been assigned a tax collection target of Rs14.02 trillion, up from the revised Rs12.33 trillion for the outgoing fiscal year — a goal that remains challenging to achieve by June 30, 2025.
Government employees can expect a salary raise between 7.5% to 10%, with the Ministry of Finance having reviewed four proposals suggesting increases between 5% and 12.5%. It appears likely that the final raise will be capped within the 7.5%–10% range. Additionally, a Disparity Allowance of up to 30% may be granted to employees in grades 1 to 16.
On the revenue front, tax receipts are projected at Rs14.2 trillion, with non-tax revenues expected between Rs4 trillion and Rs4.5 trillion. After distributing approximately 60% of the divisible pool to provinces under the NFC Award — an estimated Rs8 trillion — the federal government will be left with around Rs6 trillion in tax revenue and Rs4–4.5 trillion in non-tax income.
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To bridge the fiscal gap, the Centre will require financing of Rs6–7 trillion to maintain the budget deficit within desired limits. Under IMF directives, provincial governments are also expected to generate budget surpluses to help reduce the overall consolidated deficit.
The defence allocation is projected at Rs2.55 trillion, while interest payments on debt are estimated at Rs 8.2 trillion, down from Rs9.7 trillion the previous year. The pension bill is set at Rs1.05 trillion, subsidies at Rs1.186 trillion, and grants at Rs1.9 trillion. The Public Sector Development Programme (PSDP) will receive Rs1 trillion.
Gross revenue receipts are expected to reach Rs19.298 trillion, including the FBR’s Rs14.131 trillion target and Rs5.167 trillion in non-tax revenues. Following Rs8.2 trillion transfers to provinces, the federal government’s net receipts will stand at Rs11.072 trillion. Total federal expenditure is projected at Rs17.573 trillion, comprising Rs16.286 trillion in current expenditure and Rs1 trillion in development spending.
Meanwhile, Speaker Ayaz Sadiq has approved the National Assembly’s schedule for the budget proceedings. The House will not meet on June 11 and 12, following today’s budget presentation. General debate on the budget will begin on June 13 and continue until June 21, with no sitting on June 22.
A discussion on charged expenditures for 2025–26 is scheduled for June 23. Debates and voting on Demands for Grants and Cut Motions will take place on June 24 and 25, while the Finance Bill 2025 will be put to a vote on June 26. Supplementary Grants and related matters will be considered on June 27.