ISLAMABAD: Finance Minister Muhammad Aurangzeb on Tuesday reiterated the government’s commitment to reforming state-owned enterprises (SOEs) as a key component of the country’s economic agenda.

In his budget speech, the minister emphasised that reforms in loss-making SOEs are already underway, alongside measures to reduce the burden on the national economy and attract investment.

He noted that the government expects investments worth Rs355 billion by the SOEs, generated through their own resources. He said SOEs had an annual burden of over Rs800bn on the national exchequer. When government interventions such as subsidies, grants and equity injections are included, this figure exceeds Rs1 trillion annually.

A separate section in the budget speech was dedicated to SOE reforms. “This is why SOE reforms are of utmost importance for fiscal discipline. The government has taken several important steps regarding SOEs,” Mr Aurangzeb said.

Says state-owned enterprises costing over Rs1tr annually

He said that a key pillar of the SOE reform strategy involved categorising these entities to determine their future path — whether through ‘restructuring,’ ‘privatisation,’ or adoption of the public-private partnership (PPP) model. This categorisation process has been completed by the relevant cabinet committee, he added.

The finance minister reiterated the government’s commitment to rightsising and privatising these entities, with the process set to continue in the upcoming fiscal year 2025-26. He said the government is working on a comprehensive privatisation plan to transform these SOEs into profit-oriented organisations.

In his budget speech, the minister also mentioned the privatisation of distribution companies, adding that professional boards have now been cleared of political interference.

Mr Aurangzeb said the government is pursuing a modern and dynamic privatisation strategy aimed at enhancing public sector performance, reducing the fiscal burden and attracting investment. The strategy emphasises transparent and efficient privatisation of non-essential public sector entities to boost competition, efficiency, and private investment, particularly in the energy and financial sectors.

The minister reaffirmed that in FY26, the government aims to complete key transactions such as the privatisation of Pakistan International Airlines (PIA) and Roosevelt Hotel.

Published in Dawn, June 11th, 2025