The Pakistan Peoples Party (PPP), during a budget briefing led by Bilawal Bhutto Zardari, endorsed an 18% increase in defence spending in light of escalating tensions with India, approving an additional Rs 2.5 trillion for military allocations, quoting sources Express News reported on Tuesday.
However, the party expressed serious concerns over the inadequacy of development funds, deeming the Rs 1 trillion allocation for the Public Sector Development Programme (PSDP) as insufficient.
Sources revealed that during the session, proposals were made to keep the development programme’s size in line with the actual spending of the current fiscal year, which is reportedly under Rs 1 trillion.
The federal budget for the upcoming year is expected to be presented in the National Assembly prior to Eid, featuring a projected 7% increase in pensions and a 6% raise in salaries.
According to officials, average inflation for the next fiscal year is projected at 5%, and the salary increment has been linked to inflation rates. Some PPP members criticized the Rs 14.3 trillion tax target as unrealistic, citing economic slowdown and negative growth in the manufacturing sector.
They urged preferential treatment for sectors requiring protection and with potential for contributing to economic growth.
Additionally, PPP members advised avoiding measures that could adversely affect the agriculture sector, and they demanded tax relief for salaried individuals.
FBR sources disclosed that the government is considering imposing tax on pensions exceeding Rs 200,000 per month, which could impact retired judges, three-star generals, and top-tier bureaucrats (Grades 21 and 22). However, relief is under consideration for low-income groups, with a possible increase in the minimum taxable monthly income threshold to Rs 83,000.
