By: Masood Ahmed Siddiqui
Federal Finance Minister Muhammad Aurangzeb has presented the Federal Budget for the fiscal year 2026–27 in the National Assembly. Following a budget speech spanning approximately one and a half hours and 53 pages, discussions and debates about the budget continue across the country. The government describes it as a budget focused on economic stability and reforms, while the business community, industrialists, exporters, and economic experts are evaluating its various aspects. Some view it as a roadmap for economic growth, while others describe it as a budget full of contradictions and missed opportunities.
The overall opinion of the business community is that the budget includes positive measures such as fiscal discipline, tax reforms, and incentives for certain sectors. However, it falls short in terms of export promotion, reduction in energy costs, agricultural development, and industrial growth.
SM Tanveer, Patron-in-Chief of the United Business Group (UBG), described the budget as broadly development-oriented. According to him, the government incorporated several recommendations from the business community but overlooked some critical proposals. He pointed out that UBG had recommended reducing electricity prices to 6–7 cents per unit to enable Pakistani industries to compete with regional economies, but this suggestion was not adopted. Likewise, a proposal to provide a 10 percent Duty and Tax Remission for Exporters (DLTL) incentive on additional exports was also not approved. He emphasized that unless production costs are reduced, Pakistan will struggle to increase exports and compete effectively in global markets against regional rivals.
Zubair Tufail, President of UBG and former President of FPCCI, appreciated the tax reform measures included in the budget. He welcomed the allocation of Rs71 billion for the “Apna Ghar Housing Scheme” and the construction sector, stating that it would help boost the housing industry. Similarly, the allocation of Rs88 billion for export refinancing and increased funding for higher education and development projects were viewed as positive developments. However, he stressed the need for more effective measures to support exports, address the energy crisis, and promote investment.
Atif Ikram Sheikh, President of FPCCI, congratulated Prime Minister Shehbaz Sharif and the economic team on presenting the fifth consecutive federal budget, calling it a sign of policy continuity. According to him, the projected GDP growth rate of 3.7 percent, fiscal deficit of 0.7 percent, and a significant reduction in debt-servicing costs reflect economic improvement. Nevertheless, he argued that a budget should be more than a statement of income and expenditures; it should serve as a policy document that guides the country from stability toward robust economic growth.
Saqib Fayyaz Magoon, Senior Vice President of FPCCI, welcomed increased allocations for housing, export refinancing, higher education, and development projects. However, he noted that several key proposals from the business community were not included, such as the restoration of the Final Tax Regime for importers, reduction in corporate tax rates, lower turnover tax, elimination of minimum tax, and reforms to Section 8-B of the Sales Tax Act. He also observed that the budget lacks a comprehensive strategy for economic digitalization.
Faisal Moez Khan, President of the North Karachi Association of Trade and Industry (NKATI), stated that reducing energy costs was the industry’s primary demand, yet it remained unaddressed. He also described the tax collection target of Rs15 trillion as highly challenging and questioned the practical roadmap for achieving it.
Sheikh Tahseen Ahmed, President of the Federal B Area Association of Trade and Industry (FBATI), criticized the absence of measures to reduce industrial production costs through lower energy prices. He further noted the lack of incentives for promoting alternative energy and observed that no special initiatives had been announced to encourage overseas Pakistanis to increase remittances.
Rafiq Suleman, former Chairman of the Rice Exporters Association, described the budget as reasonable given the current economic conditions but expressed disappointment over the lack of meaningful measures for the agricultural sector. According to him, reductions in super tax, easing of withholding taxes on foreign payments, and cuts in property taxes could help improve the investment climate.
Zubair Motiwala, Chairman of the Businessmen Group (BMG) and former President of KCCI, stated that the budget offers no significant package for Karachi or the export sector. He argued that allocating only Rs10 billion for the K-4 water project could further delay its completion and that no extraordinary measures have been introduced to boost exports.
According to Waheed Ahmed, Patron-in-Chief of the Pakistan Fruit and Vegetable Association, the agricultural sector continues to face severe challenges, yet the budget lacks a comprehensive strategy to address them. He added that the decision not to fully place exports under a fixed tax regime is disappointing for exporters.
Overall, the Federal Budget 2026–27 sends a message of continued economic stability. However, the majority of the business community believes that bolder decisions are required to achieve sustainable economic growth.
If the government is serious about increasing exports, improving foreign exchange reserves, and accelerating economic growth, it must focus on several key areas. First, electricity and gas prices for industries should be aligned with those of competing regional economies to reduce production costs and enhance the competitiveness of Pakistani products in international markets. Incentive schemes for exporters should be introduced, and special rewards should be offered for additional exports. At the same time, exporters must recognize that while the government can provide support, they too have a responsibility to contribute more to the country’s economic development.
A comprehensive policy should also be formulated to modernize agriculture, promote value addition, and expand agro-based exports. The tax system should be made simpler, more transparent, and more digital to broaden the tax base and reduce obstacles to business activities. Furthermore, attractive investment schemes and incentives should be introduced for overseas Pakistanis to encourage greater remittances and investment.
If the government prioritizes these areas, it can significantly reduce business costs, boost exports, strengthen foreign exchange reserves, and pave the way for long-term economic stability and sustainable growth.
