The National Assembly (NA) successfully passed the budget for the new fiscal year on Sunday, following several modifications imposed by the International Monetary Fund (IMF) in order to secure crucial funding. The revised budget includes fiscal tightening measures such as an additional Rs215 billion in tax revenue and a reduction of Rs85 billion in public spending for the upcoming year. Notably, the federal development budget, as well as the salaries and pensions of government personnel, remain unaffected by these changes.
During the session, which lacked quorum with limited attendance from lawmakers, Finance Minister Ishaq Dar defended the government’s implementation of various pension scheme reforms. He emphasized the need to address discrepancies and clarified that individuals holding contractual jobs would have to choose between different pension plans.
Furthermore, a resolution was proposed by Jamaat-i-Islami lawmaker Maulana Abdul Akbar Chitrali to refer the budget to the Council of Islamic Ideology (CII), arguing that it was based on an “interest-based system” contradicting the Federal Shariat Court’s (FSC) directives. However, the resolution was rejected after a vote.
The revised budget aims to generate an additional Rs215 billion in taxes and reduce spending by Rs85 billion without compromising the federal development budget or the salaries and pensions of government employees. The government has set the revenue collection target at Rs9.415 trillion, with total spending amounting to Rs14.48 trillion. Provinces will receive an increased share of Rs5.39 trillion. Notable amendments include raising the allocation for the Benazir Income Support Programme to Rs466 billion and increasing the petroleum development levy from Rs50 to Rs60 per litre.
These budget changes were made after Prime Minister Shehbaz Sharif met with IMF Managing Director Kristalina Georgieva during the Global Financing Summit in Paris. The government aims to secure $1.1 billion in funding that has been stalled since November, as part of the ongoing loan program agreed upon with the IMF in 2019, set to expire on June 30.