Rs17.6 trillion federal budget 2025-26 to be unveiled today

Finance Minister Muhammad Aurangzeb is set to unveil the federal budget for fiscal year 2025-26 in parliament today. The total budget size is expected to be Rs 17.6 trillion, slightly down from Rs 18.78 trillion for the previous fiscal year. 

As per media reports, the government has set a tax collection target of Rs 14.02 trillion for the upcoming fiscal year, compared to a revised estimate of Rs 12.33 trillion for the current year. However, the Federal Board of Revenue (FBR) may face challenges in meeting the revised target by June 30, 2025.

The budget also includes proposals for salary and pension increases for public sector employees, with a range of 5 to 12.5%. The Ministry of Finance is aiming for a salary increase of 7.5 to 10% in the new budget, with a possible 30% disparity allowance for employees in grades 1 to 16.

On the revenue side, the FBR’s tax collection target has been set at Rs 14.2 trillion, while non-tax revenue is expected to range between Rs 4 trillion and Rs 4.5 trillion. 

After allocating around 60% of the federal divisible pool (FDP) to the provinces under the National Finance Commission (NFC) Award, the provinces are expected to receive Rs 8 trillion. This will leave the federal government with Rs 6 trillion in revenues and Rs 4 to Rs 4.5 trillion in non-tax revenue. To maintain the budget deficit within targeted limits, the government will require financing of Rs 6 to 7 trillion.

The defence budget is set at Rs 2.55 trillion for FY 2025-26, while interest payments on debt are expected to total Rs 8.2 trillion, down from Rs 9.7 trillion in the previous year. 

Other key expenditures include a pension bill of Rs 1.05 trillion, subsidies of Rs 1.186 trillion, and grants totaling Rs 1.9 trillion. The federal Public Sector Development Programme (PSDP) has been allocated Rs 1 trillion.

The total gross revenue receipts for the federal government are projected at Rs 19.298 trillion, with the FBR contributing Rs 14.131 trillion and non-tax revenue expected at Rs 5.167 trillion. 

After the NFC transfer, the federal government’s net revenue receipts are estimated at Rs 11.072 trillion. The total federal expenditure is estimated at Rs 17.573 trillion, with Rs 16.286 trillion earmarked for current expenditures and Rs 1 trillion for development.

In preparation for the 17th (budget) session of the National Assembly, Speaker Sardar Ayaz Sadiq has summoned a meeting of the Business Advisory Committee today at 4 pm in the Parliament House to discuss the agenda. 

Deputy Speaker Syed Ghulam Mustafa Shah will also attend the meeting, along with federal ministers Senator Azam Nazeer Tarar, Rana Tanveer Hussain, Attaullah Tarar, Dr. Tariq Fazal Chaudhry, and Khalid Magsi. Members from the treasury benches, including Sheikh Aftab Ahmed, Nuzhat Sadiq, Aijaz Hussain Jakhrani, Naveed Qamar, Shazia Marri, Shehla Raza, Aminul Haque, and Hafeezuddin, have been invited to participate. Opposition members Asad Qaiser, Zartaj Gul, Gohar Ali Khan, Malik Amir Dogar, and Riaz Fatyana are also invited.

The schedule for the budget session in the National Assembly has already been approved by Speaker Ayaz Sadiq. The budget will be presented today, with discussions beginning on June 13. The debate will continue until June 21, with no session scheduled for June 22. 

On June 23, discussions on charged expenditures for FY 2025-26 will take place, followed by debates and voting on Demands for Grants and Cut Motions on June 24 and 25. The Finance Bill 2025 will be approved on June 26, with supplementary grants and related matters discussed on June 27.