Islamabad:Federal Budget 2026-27 is a planning instrument rather than something good or bad, said Dr Abid Qaiyum Suleri, Executive Director, Sustainable Development Policy Institute (SDPI).
Dr Suleri was speaking at a post-budget briefing here at SDPI. He said that the government has attempted to provide relief to documented sectors of economy while maintaining fiscal discipline claiming that the salaried class, information technology sector and other documented businesses received notable incentives in the budget.
He, however, pointed out that the budget lacked a clear strategy for bringing the undocumented economy into tax-net and warned of practical challenges in implementing agricultural income taxation. He lamented that relief measures were being offset through revenues generated from petroleum levy and sales taxes.
Lauding provincial cooperation in federal fiscal arrangements, he apprehended that reduction in provincial development spending might affect education, health, water and local government sectors.
He stressed the need for bringing transparency in the Federal Board of Revenue (FBR)'s automated assessment and audit reforms alongside robust safeguards for citizens' data privacy. SDPI Deputy Executive Director (Policy) Dr Shafqat Munir called for strengthening climate resilience in agriculture and better integrate social protection with disaster management systems. He also called for greater investment in early warning systems, anticipatory action and climate-responsive cash transfers through the Benazir Income Support Programme (BISP).
He said the budget could not be categorised entirely as a stabilisation budget, though the economy remained under the influence of IMF programme and fiscal consolidation efforts. He noted that the government focused on improving tax compliance and revenue administration rather than imposing major new taxes.
While welcoming the introduction of a faceless tax system and improvements in tracking and monitoring mechanisms, he stressed the need for transparent implementation and stronger measures for financial inclusion.
SDPI Deputy Executive Director (Research) Dr Sajid Amin Javed said the budget remained focused on fiscal stabilisation rather than structural transformation and export-led growth. Referring to 4% GDP growth target, he said much of the projected expansion is expected to come from the real estate sector which generates limited employment and has weak linkages with construction and manufacturing.
He argued that the official inflation target of 8.2 per cent is underestimated projecting inflation to remain between 11 and 13 per cent due to elevated petroleum prices, a record petroleum development levy (PDL) target of Rs1.67 trillion, higher energy costs and external oil market uncertainties.
SDPI Research Fellow Dr Fareeha Armughan said in Pakistan, poverty became increasingly complex due to climate risks and multidimensional deprivation. Welcoming the 17 per cent increase in BISP budget and the plan to expand beneficiary families to 10.2 million, she said Pakistan needs to move beyond conventional cash assistance to adaptive social protection models linked with employment generation, micro-enterprises and women's economic empowerment.
