Pakistan Federal Budget 2025–26 – Full Summary in Plain Text
Budget Size and Main Focus
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The total budget for 2025–26 is 17.57 trillion Pakistani Rupees.
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It is 7% less than last year’s budget of 18.9 trillion.
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The government is focusing on controlling the fiscal deficit, boosting tax collection, and encouraging exports.
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GDP growth target is set at 4.2% for the coming year.
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Fiscal deficit target is 3.9% of GDP, reduced from last year’s 5.9%.
Defence and Security Spending
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Defence budget has been increased by 20%, reaching 2.55 trillion rupees.
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This is about 19 to 20% of the total budget and roughly 2.5% of the national GDP.
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The rise is influenced by recent security concerns and military tensions.
Taxation and Revenue Generation
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Tax revenue target is set at 14.1 trillion rupees, showing an increase of nearly 19%.
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Income tax relief has been introduced for salaried individuals. Those earning between 600,000 and 1.2 million rupees per year will now pay only 2.5% tax, reduced from 5%.
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The tax net is being widened to include sectors like agriculture, real estate, and retail.
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Inflation is expected to stay around 7.5% during this fiscal year.
Public Development and Services
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Development and public service spending has been reduced.
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Public Sector Development Program (PSDP) has been trimmed compared to previous years.
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Health, education, and social sectors will continue to receive funding but at a controlled rate due to fiscal tightening.
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Transfers to provinces will continue under the NFC Award.
Economic Goals and Reforms
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The budget is part of a broader reform plan supported by the International Monetary Fund (IMF).
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Focus is on reducing reliance on loans, improving economic management, and increasing exports.
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Import duties on raw materials are being reduced to support local industries.
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There is a push for structural reforms, but critics say deeper reforms are still needed.
Summary Table
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Total Budget: 17.57 trillion PKR
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GDP Growth Target: 4.2%
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Fiscal Deficit Target: 3.9% of GDP
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Defence Budget: 2.55 trillion PKR (20% increase)
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Tax Revenue Target: 14.1 trillion PKR
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Inflation Estimate: 7.5%
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Tax Relief: 2.5% tax for 600k–1.2m annual income group
