Business leaders, industrialists, and employee unions voice strong opposition to federal budget

• Railway Workers Union and Education Pensioners Association criticised the lack of significant pension reforms, calling the budget’s proposals “ridiculous

The federal budget for fiscal year 2025-26 has faced significant backlash from business leaders, industrialists, and employee unions, with many criticizing the government’s approach as ineffective in addressing key economic challenges.

In Karachi, Businessmen Group (BMG) Chairman Zubair Motiwala called the budget a “camouflage” that failed to provide any meaningful relief to businesses or the public. He argued that the government’s ambitious tax collection targets and focus on digitalisation were unrealistic, given the country’s fragile economic environment, high inflation, and IMF-imposed constraints. 

Motiwala raised concerns that the government’s reliance on extracting more revenue from already compliant taxpayers would burden the formal sector, stifle economic growth, and discourage investment.

The Overseas Investors Chamber of Commerce and Industry (OICCI) echoed similar sentiments, expressing disappointment over the limited progress in addressing corporate tax inequities. 

The OICCI emphasized the need for a comprehensive overhaul of tax structures to attract foreign investment and enhance Pakistan’s competitiveness. It also lamented the absence of a strategy to formalize Pakistan’s large informal economy, which remains a critical avenue for increasing revenue.

Meanwhile, support for small and medium-sized enterprises (SMEs) was a focal point in the budget, with the government announcing plans to boost SME financing and promote exports. However, Federal B Area Association of Trade and Industry President Shaikh Muhammad Tehseen called on the government to engage more with stakeholders to ensure the success of these initiatives. He stressed the need for reduced production costs, including lower interest rates, utility charges, and petroleum prices to support SMEs.

Employee unions, including the All Pakistan Clerks Association (APCA) and the All Government Employees Grand Alliance (AGEGA), also strongly rejected the budget. They condemned the modest 10% salary increase for government employees, calling it inadequate in the face of soaring inflation. 

Union leaders, such as Shehzad Manzoor Kiyani of APCA, compared the salary hikes of MPs and ministers to the meager adjustments for workers, describing the budget as a “severe joke.” They warned that the budget would deepen poverty, with many families already struggling to meet basic needs.

Pensioners, represented by organizations like the Railway Workers Union and Education Pensioners Association, criticised the lack of significant pension reforms, calling the budget’s proposals “ridiculous.” They expressed anger over what they perceived as favoritism toward the political and business elite, with no real relief for pensioners and low-income workers.

In Rawalpindi, a protest led by unions such as the Pakistan Workers Federation and the All Government Employees Coordination Council gathered hundreds of workers demanding urgent action. They called for salary and pension increases in line with inflation, a higher minimum wage of Rs60,000, and an end to the privatization of public institutions. Labour leaders warned of a nationwide protest if their demands were not addressed.

The budget’s focus on digital initiatives and the promotion of a cashless economy has also faced criticism. Critics argue that these measures alone will not stimulate exports or drive industrialization, essential for sustainable economic growth. Despite the government’s push for digitalization, many believe that broader structural reforms are necessary to address the country’s deep-rooted economic challenges and ensure equitable growth across all sectors of society.