Budget FY26: A Transformative Fiscal Blueprint As Pakistan prepares for the Federal Budget FY26, anticipation builds around its potential to reshape the macro-fiscal framework. The budget is expected to focus on three core pillars:
Growth-Oriented Reforms to stimulate investment, enhance productivity, and formalize the economy.
Comprehensive Expenditure Reforms aimed at optimizing resources and transforming social welfare.
Equitable Domestic Resource Mobilization (DRM) Reforms to broaden the tax base and encourage voluntary compliance.
Key Highlights from Recent Developments
Development Spending: The National Economic Council (NEC) has approved a record Rs4.2 trillion development outlay, with Rs1 trillion allocated for federal projects and Rs2.87 trillion for provincial initiatives.
Fiscal Targets: The government aims for a 4.2% GDP growth rate in FY26, following a 2.7% growth in FY25.
Taxation & Digital Economy: Authorities are considering preferential GST rates for digital transactions to encourage financial inclusion.
Salaried Class Relief: Inflation-adjusted salary increments are expected, with civil servants demanding a minimum wage increase to Rs50,000.
Debt & Revenue Management: The Federal Board of Revenue (FBR) is targeting Rs14.1 trillion in revenue, while Rs9 trillion is earmarked for interest payments.
These reforms aim to streamline taxation, enhance economic documentation, and promote investment, setting the stage for sustainable growth and fiscal stability.
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