Govt committed to inclusive, sustainable economic growth: FinMin Aurangzeb 

ISLAMABAD: The government of Pakistan vision goes beyond stability as it aims for inclusive and sustainable growth in line with the Prime Minister’s development vision of equal economic opportunity for all citizens, said Finance Minister Senator Muhammad Aurangzeb while winding up debate on the federal budget for fiscal year 2025–26 in Senate on Saturday.

Addressing the Upper House, the minister highlighted that in the outgoing fiscal year, the government avoided any mini-budget, managed to curb inflation, improved foreign exchange reserves, and significantly narrowed the current account deficit.

He said government expenditures increased by only 1.9 percent — a marked slowdown compared to previous years when spending rose by up to 13 percent. Calling this a real example of financial discipline, he said the government is leading by example in reducing wasteful spending.

Aurangzeb said the government announced a major relief for the salaried class, saying that the income tax rate for those earning between Rs0.6 million and Rs1.2 million annually would be reduced from 2.5 percent to just 1 percent.

He termed it a practical acknowledgement that the state must not overburden tax-compliant middle-income earners and expressed hope that this would boost disposable income and restore public trust in the tax system.

He said the government also announced a 10 percent increase in salaries and a 7 percent hike in pensions for employees, acknowledging the financial pressures they face and reaffirming that the state stands by them.

On the solar energy front, Aurangzeb clarified that the earlier proposed 18 percent sales tax on imported solar panel components has been reduced to 10 percent and will apply only to 46 percent of imported items.

He emphasized the government’s commitment to encouraging domestic solar production while supporting the clean energy transition. He also condemned opportunistic hoarding and artificial price hikes by some market players ahead of the new tax’s enforcement, warning that strict legal action will be taken in coordination with provincial governments.

The minister also announced that the budget for the Benazir Income Support Programme (BISP) was being increased from Rs592 billion to Rs716 billion, a move expected to benefit millions of  families including widows, orphans, elderly citizens, and persons with disabilities.

He called this expansion not a temporary relief effort but a reflection of the state’s long-term commitment to the most vulnerable. He also mentioned skill-development initiatives under the same umbrella, terming them a critical step toward sustainable livelihoods.

The finance minister further informed the House that Prime Minister Shehbaz Sharif had issued special directions to include additional safeguards in the proposed laws governing the Federal Board of Revenue (FBR) enforcement, to prevent abuse of authority.

He noted that detailed consultations were held with Senators Saleem Mandviwalla and Farooq H. Naek, resulting in clearer and more balanced provisions, which will be shared during his upcoming speech in the National Assembly.

Aurangzeb said, as in the previous year, more than 50 percent of the Senate Standing Committee’s recommendations would be incorporated into the final Finance Bill.

Meanwhile, he expressed gratitude to senators for their insightful contributions and patriotic suggestions, saying these helped strengthen the government’s resolve toward self-reliance, transparency, and growth.

He acknowledged the active role of the Senate and its Standing Committee on Finance, noting that meaningful consultation had shaped many of the budget’s final contours.