Federal Budget 2024-25 – Key Highlights

Preface:

The Key Points of Federal Budget 2024The recent announcement of the Federal Budget 2025 for Pakistan included several significant points to foster economic stability and growth. Here are some of the key features:

Budget Allocation and Objectives:

• The total budget allocation amounts to Rs. 18.9 trillion, representing a 30% increase from the previous year.

• The target for GDP growth is set at 3.6%.

• The projected budget deficit is 6.9% of GDP.

Income and Spending:

• Total revenue is Rs. 17,815 billion, with net revenue of Rs. 10,377 billion after provincial transfers.

• Current expenditure amounts to Rs. 17,203 billion, marking a 29% increase.

Taxation and Economic Restructuring:

• The set target for tax collection is Rs. 13 trillion.

• There is a focus on expanding the tax base and modernizing the economy.

• Progressive taxation will be introduced, and transaction taxes for non-filers will be increased.

• Sales tax exemptions and preferential rates will be abolished, and a standard sales tax will be imposed on various goods.

Sectoral Allocations and Initiatives:

• Farmers will benefit from a Rs. 5 billion Kissan Package.

• An allocation of Rs. 253 billion for energy sector development projects has been made.

• Infrastructure investments, including Rs. 21 billion for the 1200 MW Jamshoro Power Plant and Rs. 11 billion for the NDTC system upgrade, are significant.

• Import tax on solar panels and related equipment exempted to stimulate the solar industry.

Wage and Pension Adjustments:

• The minimum wage has been increased from Rs. 32,000 to Rs. 37,000.

• Government employees in grades 1-16 to receive a 25% salary increase, while those in grades 17-22 will see a 20% raise.

• A new pension scheme was introduced for new government employees, involving monthly salary deductions for pensions.

Social Welfare and Support Programs:

• The budget for Benazir Income Support Program (BISP) increased by 27% to Rs. 593 billion.

• Expansion of the education scholarship program to cover an additional 10 million children.

Defence and Security:

• The defence budget allocation has been increased to Rs. 2.122 trillion, marking a substantial surge from the previous year​ (SAMAA)​.

Inflation and Economic Stability:

• Efforts are being made to decrease inflation from 38% to approximately 12% while maintaining focus on diminishing unnecessary expenses and transitioning to a market-oriented economic model.

Conclusion:

To summarize, the Federal Budget 2024-25 of Pakistan demonstrates a holistic approach designed to promote economic stability and advancement across diverse sectors. By substantially increasing the budget allocation, especially in areas such as infrastructure, energy, and social welfare, the government aims to boost economic activity while bolstering support for vulnerable sections of society through improved social safety nets and welfare programs. Emphasizing progressive taxation, modernization of the economy and curbing inflation reflects a dedication to sustainable economic growth. As Pakistan progresses with these efforts, the budget lays out a clear path for attaining its economic goals in the upcoming fiscal year.

These measures form part of the government's overarching strategy to ensure economic stability, provide support to vulnerable segments of society, and promote sustainable growth.

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