ISLAMABAD: The federal government on Monday presented a Rs28.8 trillion compulsory spending bill in the National Assembly for the upcoming fiscal year, reflecting a 17% reduction from the current year’s budget. The decline is primarily attributed to lower interest costs following a recent drop in interest rates.
Despite the overall cut in total spending, the bill reveals significant budget increases for key state institutions, many of which received double-digit hikes. This has raised concerns among fiscal observers about the government’s prioritization amid ongoing economic challenges.
The Rs28.8 trillion outlay covers essential debt servicing, defense expenditure, and salaries of civil and military employees—components the government categorizes as "non-discretionary" or compulsory spending. These expenses consume a substantial portion of the federal budget, leaving limited fiscal space for development or public welfare initiatives.
Sources in the Ministry of Finance stated that the decrease in interest rates helped bring down debt servicing costs, which have long been the single largest expenditure item for the government. However, this breathing room has been offset by increased allocations to institutions deemed critical for national operations.
According to budget documents, some key organs of the state—including the judiciary, defense, and select regulatory bodies—received notable funding increases. Analysts say these allocations reflect the government’s efforts to strengthen administrative and institutional performance, though they also raise questions about the balance between development spending and governance costs.
The bill was laid in Parliament as part of the federal budget process for fiscal year 2025–26. Lawmakers will now debate its provisions before the final approval. Finance Ministry officials defended the allocations, stating that the budget aligns with economic realities and Pakistan’s fiscal targets under IMF guidelines.
Opposition parties have criticized the sharp increases for state institutions, urging the government to direct more funds toward social sectors like health and education instead. The coming days are expected to see intense debate in Parliament as the government seeks to pass the budget bill by the end of June.
