With over 90 per cent of the respondents of the annual budget survey that runs on Dawn.com every year during the budget belonging to the salaried class, the survey indicates what the third-largest taxpayer group wants. Arguably, it is the salaried class that has been hit the hardest in recent years, with inflation eating away at eroded incomes with no place to hide from the barrage of taxes. This year, we collected data to answer some of the more pertinent questions surrounding the upcoming budget and their own financial wellbeing in the past year.

Is Pakistan ready for a growth-forward budget, or should it continue to play a guarded fiscal game?

While it may be easy to throw aside tight-fisted austerity measures and opt for an expansionary budget, wage earners understand the necessity of the stabilisation measures and the pitfalls of the doomed boom-bust cycle. This is why 80pc of the respondents said that the country needs to stay in stabilisation mode and not change gears to growth just yet.

In the wake of the Indus treaty crisis and ensuring conflict with India, should the defence budget be increased?

After all the noise surrounding the Pakistan-India conflict died down, the defence budget has now been slotted to increase by 18pc. However, many of the respondents feel that there is no need to increase defence spending. No doubt, much of the salaried group, already caving under the mounting financial pressures of inflation, by now understand the state mechanics and the reality of a defence budget hike and how that would translate into direct — and now mostly indirect — taxes. On the other, there is a spark of optimism in the result, probably relating to how swiftly the conflict was resolved by the military within their existing budget. Naturally, one might assume that the defence budget is probably sufficient as is, but that ship has sailed.

What are some of the most costly avenues for citizens in regard to their daily life essential spending?

Among the different heads of expenses, perhaps the most impact has been on kitchen expenses and transport. While savings, investment, and entertainment expenses dipped down, hit rock bottom, and stayed there, kitchen and transport expenses were among those that were hit the hardest. The results betray a whole segment of society that seems to have been forced to slowly turn away from every comforting luxury to focus largely on the most necessary of expenses. That said, the results are also mildly troubling given the low rate of saving. That rate may be reduced even further if the proposed 25pc tax on income from debt securities and the 15pc tax on income from equities push people even further away from investments and saving devices.

It is a distressing situation when essential goods like food are reaching startling prices despite what the state has been continually celebrating as a new era of historically low inflation. Now with troubling events occurring in the global economy, especially with the recent Israel-Iran conflict, fuel prices may be impacted, thereby dialling up an already costly expense for the salaried group.

That said, the new budget does offer some direct tax relief (followed by a healthy dose of indirect taxes to keep the people on their toes), and the state seems to be optimistic, as it usually tries to be about the new fiscal year; only time will tell how well the numbers will add up.

Published in Dawn, The Business and Finance Weekly, June 16th, 2025