Budget Special: Unpacking a paradoxical fiscal plan

In the national budget for fiscal year 2025-26, real estate and construction have got some incentives, and key agricultural inputs, including fertilisers and pesticides, have been kept untaxed. Though appreciable under an ideal situation, pampering these sectors without taking enough care of small industrialists and the urban middle class could widen the divide between the ruling elite — with their alleged financial interest in agriculture, real estate and construction — and the struggling urban population and small industrialists. The budget presents a paradox: ambitious rhetoric of relief overshadowed by structural constraints. The 10 per cent increase in salaries of government employees and 7pc rise in pensions of retired government employees, plus a reduction in their income tax slabs and a sizable allocation of Rs722 billion for welfare spending under the Benazir Income Support Programme (BISP), are pro-people measures. But if you compare a Rs1 trillion development budget with the Rs8.207tr allocated for debt servicing and Rs2.55tr for the defence sector, you can imagine the severity of structural constraints.