Govt to present Rs17.6tr federal budget for FY26 today
ISLAMABAD: The federal government is set to unveil the budget for fiscal year 2025–26 today, with the total outlay estimated at Rs17.6 trillion.
According to sources in the Ministry of Finance, as per initial estimates, the federal revenue target is projected at Rs19.3 trillion, out of which the Federal Board of Revenue (FBR) is expected to collect Rs14.1 trillion in taxes.
Sources further revealed that 57% of the FBR’s tax revenue approximately Rs8.3 trillion will be transferred to the provinces under the National Finance Commission (NFC) Award.
The budget will also outline key details regarding the fiscal deficit, debt servicing, and government borrowing, which continue to be major financial challenges.
As part of the upcoming federal budget for FY 2025–26, the government is expected to face a budget deficit exceeding Rs6.5 trillion. The largest expenditure item in the budget will be interest payments on public debt, with an allocation of Rs8.5 trillion, underscoring the growing burden of domestic and external borrowing on the national economy.
In addition to managing the fiscal deficit, the government is also expected to outline allocations for the Public Sector Development Programme (PSDP) and initiatives aimed at achieving energy sector targets, although exact figures for development spending are yet to be disclosed.
A key focus of the development plan is the energy sector, with a target to add 2,800 megawatts (MW) of electricity generation capacity. Of this, 2,633 MW will be generated through solar net metering, signaling a significant push toward renewable energy and sustainability.
In addition, the budget includes a national-level project to upgrade the electricity transmission and distribution systems in 15,352 villages across the country. This initiative aims to reduce line losses, improve energy delivery, and support rural electrification.
The federal government has projected a current account deficit of 0.5% of GDP — approximately $2.1 billion — for the fiscal year 2025–26, reflecting cautious optimism in managing the country’s external balance.
According to budget documents, the goods export target has been set at $35.3 billion, while imports of goods are projected at $65.2 billion.
In the services sector, exports are targeted at $9.6 billion, with imports expected to reach $14 billion.
The government also aims to attract $39.4 billion in remittances from overseas Pakistanis, which will play a vital role in supporting the balance of payments.
Overall, total exports of goods and services are projected at $44.9 billion, while total imports are expected to reach $79.2 billion, maintaining a significant trade deficit but within manageable levels.
The Finance Minister, during the presentation of the federal budget for FY 2025–26, outlined a range of strategic policy initiatives aimed at industrial development, education, infrastructure, and sports.
Key Announcements:
🔹 Rs250 million allocated for the establishment of 1,000 industrial stitching units, aimed at boosting employment and textile exports.
🔹 Launch of a new laptop scheme and the Pakistan-Bangladesh Friendship Scholarship Program, targeting students and youth empowerment.
🔹 Progress highlighted on two key infrastructure projects: Main Line-1 (ML-1) railway project and the Karachi Circular Railway.
🔹 Announcement of the Arshad Nadeem / Shehbaz Sharif High-Performance Sports Academy, aimed at nurturing athletic talent and supporting Pakistan’s presence in global sports.
🔹 Inclusion of major infrastructure development projects in Azad Jammu & Kashmir, Gilgit-Baltistan, and the merged tribal districts, reflecting the government’s focus on regional equity and development.
