• Sherry Rehman says almost half the budget consumed by debt repayment, calls for governance reforms
• Senate opposition leader says rich got relief while poor got levies
• PTI leader claims debt rose from Rs44tr to Rs97tr in four years

ISLAMABAD: Senators from both sides of the aisle on Monday raised alarm over burgeoning debt obligations that have severely constrained the space for development, social protection, and public investment.

Starting the budget debate in the up­­per house of parliament, PPP Senator Sher­­ry Rehman said 42.8 per cent of the budget was being absorbed by debt servicing, including both interest and principal repayments. “When nearly half of the federal budget is consumed by debt obligations, the space available for development, social protection and public inv­estment becomes severely constrai­ned,” she noted. The senator said that state-owned enterprises (SOEs) continued to place a heavy burden on public finances.

“Losses of state-owned enterprises reached Rs832.848 billion in FY2025, with cumulative losses now standing at Rs6.563 trillion. Yet another Rs451 billion has been allocated to SOEs in this budget. This is a structural challenge that cannot be ignored indefinitely,” she said, while calling for reforms in governance and public expenditure.

She also called for a “fair taxation system” built on direct taxes and a broader base, warning that Pakistan’s growing reliance on indirect levies was undermining fiscal stability and burdening ordinary citizens.

The PPP leader also flagged the ballooning Petroleum Development Levy as a key concern. “Excessive reliance on levies and indirect taxation raises serious questions about the long-term sustainability of our revenue structure,” the senator said.

Senator Rehman also expressed concern over declining climate allocations despite Pakistan’s growing climate vulnerabilities. “It is deeply concerning that climate-related levies are being collected while climate financing remains inadequate and climate budgets continue to shrink…” she said.

Senate Opposition Leader Raja Nasir Abbas said the budget ignored ordinary Pakistanis. “The people of Pakistan have not been kept in focus. The Pakistani people are irrelevant in this budget,” he said.

He said debt had been on the rise since the government took office, warning that the debt was rising so rapidly that the country was heading toward becoming a “failed state”. He said the public would pay Rs8 trillion in interest this year.

The opposition leader alleged the budget gave relief to the rich while the poor paid levies. “You are taking levies from the poor youth who put petrol in motorcycles… Where is it being spent? You are not cutting your expenses,” he chided the government. The opposition leader also accused the Centre of forcing provinces to give up money in violation of the 18th Amendment. He, however, end­ed with an appeal for dialogue: “Come, let’s sit together and bring reforms.”

PTI Senator Mohsin Aziz said Pakistan’s debt stood at Rs44 trillion over 74 years, but surged to Rs97 trillion in the last four years. “Where are we taking Pakistan? Debt has more than doubled,” he said. “Where there is no political stability, this is what happens.”

He compared Pakistan’s exports to India’s $440 billion and said that “every day we are moving backwards”. Wheat flour, he noted, had risen from Rs1,100 to Rs2,600 per 40kg, while other essentials had also become unaffordable.

The senator also criticised the petro­leum development levy, saying it was being collected directly from the public. He called the budget “empty” and said that “no matter how many claims you make on TV, this budget offers nothing”.

PPP Senator Rana Mahmoodul Has­san urged the Senate to take up the issue of targeted attacks against Pakistanis in South Africa, saying the Foreign Office must intervene immediately to protect over 100,000 nationals living there. “Kidnappings for ransom and killings are occurring. The Foreign Office should intervene,” the senator said.

Published in Dawn, June 16th, 2026