ONE of the strongest features of the recent budget is its continued emphasis on fiscal responsibility. Successive govern-ments have struggled with chronic budget deficits, excessive borrowing and a narrow tax base. The present budget attempts to address these weaknesses by improving revenue collection, expanding document-ation of the economy and strengthening tax administration. If these reforms are implemented fairly and consistently, they can gradually reduce Pakistan’s dependence on debt, and enhance investor confidence.

Equally encouraging is the government’s continued focus on export promotion, information technology, agriculture, infrastructure development and social protection. The increase in allocations for federal social protection programmes demonstrates recognition that economic reforms must not ignore the most vulner-able segments of society. At the same time, salary and pension increases, together with an increase in the minimum wage, provide some relief to working families.

However, for millions of households, inflation remains the defining economic reality. For salaried employees and pensioners, purchasing power has really eroded significantly over recent years. The business community faces its own difficulties. Higher taxation, increasing compliance requirements and rising input costs continue to affect profitability, particularly for small and medium-sized enterprises.

These businesses account for a subs-tantial share of employment and deserve greater policy support through easier access to finance, lower regulatory burdens and improved energy reliability.

Agriculture, the backbone of Pakistan’s rural economy, also requires sustained attention. Budgetary allocations for water management, mechanisation and modern farming techniques are laudable. However, as Pakistan’s experience has repeatedly demonstrated, effective implementation — not budgetary announcements — is the true measure of success.

Perhaps the most immediate structural issue remains tax equity. A relatively small number of documented taxpayers continues to shoulder a disproportionate burden, whereas significant segments of the informal economy remain outside the tax system. Sustainable reform demands that taxation be both broad-based and equitable.

Another matter deserving attention is public expenditure. More than Rs8 trillion has been allocated for debt servicing alone, illustrating the enormous financial burden inherited from years of borrowing. Every rupee spent on interest payments is a rupee unavailable for schools, hospitals, research, infrastructure and poverty reduction. This reality underscores the importance of maintaining fiscal discipline and reducing wasteful expenditure.

Pakistan possesses rather significant comparative advantages: a strategic geographic location, abundant natural resources, an expanding technology sector, a resilient entrepreneurial class, and one of the youngest populations in the region. Harnessing these strengths requires a long-term national economic vision that rises above political divisions.

Pakistan has repeatedly demonstrated resilience in the face of adversity. If this budget is implemented with due integrity, administrative efficiency and, indeed, political continuity, it could become an effective and important milestone in the country’s march on the road to economic recovery. If implementation falters, however, the opportunity may once again be lost.

Shahid M. Murtaza
Karachi

Published in Dawn, July 23rd, 2026