The government on Friday decided to proceed with its plan to present a full fiscal year 2025-26 budget amid a suggestion to Prime Minister Shehbaz Sharif to unveil a short-term budget and also get provincial contributions to meet increased defense expenses.
The participants of a budget preparation meeting on Friday also urged the government to allocate substantial funds for national defense and expedite the completion of the Diamer-Basha dam, citing India's move to hold the Indus Waters Treaty in abeyance.
During the meeting, the prime minister also asked the Federal Board of Revenue to tax the income of Islamabad Club, which is the recreational venue for the country's bureaucrats, foreign diplomats and richest persons of society.
The premier chaired the meeting of his cabinet ministers and top-ranking business leaders of the country to discuss the 2025-26 budget, to be unveiled in the first week of June.
There was a suggestion in the meeting that due to the prevailing tensions with India, the government should provide maximum possible money for the defence and also consider the option of giving a shorter than one-year budget, according to multiple participants of the meeting.
Prime Minister Shehbaz Sharif did not immediately share his mind on the proposal. The Constitution provides a room for giving a four-month budget. But a finance ministry official said that the government's plan to present the entire fiscal year 2025-26 budget remained intact.
The Ministry of Finance has assured full provision of the resources to deal with the India-created conflict situation and has proposed at least 18% increase in the allocation for the next fiscal year over this year's spending.
There was also a proposal in the meeting that the government should freeze next fiscal year's development budget at this year's actual spending, which may not cross Rs600 billion due to low spending so far.
The sources said that some cabinet members also suggested giving maximum money for the completion of the Diamer-Basha dam so that the reservoir is completed at the earliest to store water.
The participants urged to build sufficient foreign exchange reserves for meeting any unexpected import needs during the tension times.
One of Pakistan's richest persons suggested the premier to reduce the bloated size of the government. The private sector participants also asked the PM to reduce taxes on textile exports and also suspend the Export Development Surcharge being collected from exporters.
One of the participants urged the government to ban economic transactions by non-filers, including banning trading of grains by them.
An official press statement underlined that the Prime Minister said that providing relief to the common man in the upcoming budget was the government's priority, and all-out resources will be utilized to reduce the financial difficulties of the poor and middle class.
The prime minister directed that the upcoming budget should be prepared with a focus on sustainable export-driven growth and considering the projects to promote industries and increase production. The budget should also focus extensively on the creation of jobs, agriculture, information technology, small and medium enterprises, and the housing sector, said Sharif.
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