Ministry of Finance says civil government spending rise largely driven by salaries, immunisation programme

The Ministry of Finance has pushed back against what it described as “misleading” media reports on civil government expenditure, arguing that a significant portion of the increase in federal spending during FY2025-26 was driven by employee compensation adjustments and funding for public health initiatives rather than a broad rise in operational expenses.

In a statement issued on Wednesday, the ministry said civil government expenditure during the first nine months of FY2025-26 stood at Rs629 billion, compared to Rs559 billion during the same period last year, reflecting an overall increase of 12.5%.

According to the breakdown shared by the ministry, employee-related expenditure rose from Rs388 billion to Rs427 billion, an increase of around 10%, which it attributed primarily to salary and pay adjustments announced in the federal budget.

Meanwhile, non-employee-related expenditure increased from Rs171 billion to Rs202 billion, representing a rise of Rs31 billion.

However, the ministry said that Rs29 billion of this increase was allocated to the Expanded Programme on Immunization (EPI), which it described as a critical national public health initiative focused on protecting children against preventable diseases.

“After adjusting for the EPI allocation, the actual increase in non-employee-related expenditure is only around Rs2 billion,” the ministry said.

The finance ministry argued that presenting aggregate expenditure figures without accounting for these components creates an incomplete picture of government spending trends and overlooks allocations tied to employee compensation and public welfare programmes.