Federal govt considers 20% hike in BISP Kafalat Payments in Budget 2025-26

In a significant development aimed at supporting vulnerable families amid rising inflation, the federal government is reviewing a proposal to increase the quarterly payment under the BISP Kafalat Program by 20%, according to the International Monetary Fund (IMF).

The IMF’s latest review report confirmed that the Benazir Income Support Programme (BISP) is on track for full execution this fiscal year, with a notable expansion in unconditional cash transfers (UCT). The Fund lauded Pakistan’s effort to strengthen social protection but emphasized the importance of ensuring that benefit levels keep pace with inflation.

Earlier this year, the government raised the quarterly BISP Kafalat stipend from Rs10,500 to Rs13,500, which included:

A one-time increase in the generosity level (from covering 9.6% to 12.4% of the bottom income quintile’s consumption basket)

Enrollment of 700,000 additional families, bringing the total to 10 million beneficiaries

Now, the government is reportedly planning to raise the quarterly payment further—from Rs13,500 to Rs14,500 by end-January 2026, maintaining purchasing power amid persistent inflation.

The IMF emphasized that Pakistan must gradually increase the benefit’s generosity level to at least 15% of the poorest households’ consumption, aligning it with global standards.

This goal would be revisited after updated data from the Household Integrated Economic Survey (HIES) becomes available.

The proposed enhancement is expected to be part of the 2025–26 federal budget, signaling continued commitment to social protection and poverty alleviation.