Calling for a fundamental restructuring of Pakistan’s fiscal architecture, the Muttahida Qaumi Movement-Pakistan (MQM-P) on Wednesday unveiled its Shadow Budget 2026-27, and demanded that cities and districts across the country be granted direct access to national financial resources to ensure rapid development and efficient public service delivery.
Presenting the party’s alternative budget alongside members of the United Business Forum at a hotel, senior MQM-P leader and Member of the National Assembly Dr Farooq Sattar argued that Pakistan’s economic stagnation cannot be overcome unless urban centres and districts receive their rightful share of national resources directly from the federal government.
Dr Sattar said that under Article 160 of the Constitution, direct fiscal allocations can be made to cities through the National Finance Commission (NFC) framework. He demanded that not only Karachi but all 144 cities and districts of Pakistan should receive direct financial resources, bypassing provincial control where necessary to ensure equitable development and improved governance.
He proposed that the federal government earmark a portion of the funds transferred to provinces for direct allocation to urban centres. Referring to Sindh, he said if the federation transfers Rs2.1 trillion to the provincial government, at least Rs300 billion should be provided directly to Karachi. He alleged that successive provincial administrations have failed to provide cities with their due share of resources.
“The resources of cities and districts do not belong exclusively to provincial governments,” he said, adding that direct fiscal transfers should also be extended to cities such as Larkana, Dadu, Sukkur, Hyderabad and Mirpurkhas.
Highlighting the country’s economic challenges, Dr Sattar described economic sovereignty as a matter of national survival. He said Pakistan recently attracted international attention due to diplomatic efforts led by Field Marshal Asim Munir and Prime Minister Shehbaz Sharif. He stressed that the improved geopolitical environment must now be leveraged to accelerate economic growth.
The MQM-P leader said that nearly 250 million Pakistanis are facing economic hardship, with the purchasing power declining sharply. He cited examples of families in Karachi’s Orangi Town and Lyari struggling to afford basic necessities such as flour and medicines.
Presenting key proposals of the shadow budget, he called for the immediate abolition of the petroleum levy, the replacement of the Benazir Income Support Programme with a Benazir Income Generation Programme, and a reduction in the tax burden on salaried middle-class citizens. He criticised what he described as an unfair taxation structure in which teachers earning between Rs60,000 and Rs70,000 per month pay income tax while large landowners remain outside the tax net.
Dr Sattar advocated shifting the tax system towards greater reliance on direct taxation, proposing a tax mix of 52 percent direct taxes and 45 percent indirect taxes. He also urged stronger taxation of large capital holders instead of ordinary citizens.
The MQM-P’s shadow budget proposes increasing agricultural allocations from Rs2 billion to Rs5 billion, generating one million jobs, boosting textile exports, and raising information technology exports from Rs10 trillion to Rs15 trillion. The party also recommends reducing the federal fiscal deficit from four per cent to 2.2 per cent, and calls on the State Bank of Pakistan to further lower the policy interest rate.
Dr Sattar said Pakistan needs to increase national income while curbing expenditure, warning that rapid population growth is placing mounting pressure on available resources. He maintained that the country’s export performance has stagnated at around $36 billion, and argued that an overtaxed economy cannot achieve sustainable growth.
He further called for substantial reforms in the Federal Board of Revenue (FBR), including the induction of educated young professionals and the adoption of modern technologies, to curb revenue leakages, which he claimed amount to approximately Rs3.6 trillion annually.
The MQM-P leader also demanded that the Public Sector Development Programme be increased to at least Rs2 trillion, saying that such an investment is essential for improving living standards and strengthening economic stability.
Discussing governance and representation, Dr Sattar argued that Pakistan’s parliament should include greater representation of educated youth, workers and the middle class rather than feudal elites. He emphasised the need for reforms in the water, energy, electricity and gas sectors to support long-term economic growth.
He said the MQM-P’s shadow budget offers a people-centric roadmap for economic recovery and sustainable development, adding that the party remains committed to protecting the interests of farmers, labourers, small growers and the urban middle class. He also expressed confidence that reforms in the education and health sectors, led by federal ministers Khalid Maqbool Siddiqui and Mustafa Kamal respectively, would deliver significant improvements through cooperation with provincial governments.
