Mirza Ikhtiar Baig Calls Federal Budget Positive and Balanced

Pakistan Peoples Party Parliamentarians (PPPP) senior leader Mirza Ikhtiar Baig has publicly supported the 2026-27 federal budget, characterizing it as a balanced fiscal plan. During a National Assembly debate on Sunday, Baig emphasized that despite economic constraints, the government has prioritized national defense while proposing specific tax relief for consumers and industry.

How the provinces are funding national defense

According to Mirza Ikhtiar Baig, the federation and all four provinces—Sindh, Punjab, Balochistan, and Khyber Pakhtunkhwa—have reached a consensus to contribute funds toward national defense. Baig stated that these regional governments and their citizens have agreed to provide billions of rupees to acquire modern technology and strengthen the country’s defense deterrence. He credited Prime Minister Shehbaz Sharif, President Asif Ali Zardari, and PPP Chairman Bilawal Bhutto Zardari for fostering this political cooperation, which he described as a significant development in national history.

Why the PPPP is calling for fuel tax cuts

Baig urged the federal government to lower the petroleum development levy (PDL) to provide relief to lower-income segments, particularly those relying on motorcycles and rickshaws. Citing official figures, Baig noted that the current levy stands at Rs117 per litre, which generates approximately Rs1.7 trillion annually. He argued that the government possesses sufficient fiscal space to reduce this levy to Rs50 per litre. This proposal aims to mitigate the immediate cost-of-living pressure on daily commuters.

What obstacles face the export and business sectors

The business community has identified three primary barriers to foreign direct investment and export growth, according to details shared by Baig following meetings with the prime minister and finance minister. These obstacles include:

• Heavy tax burdens: High taxation levels on domestic businesses.
• Energy costs: Electricity tariffs currently between 15 and 16 cents per unit, which are uncompetitive compared to regional peers.
• Lending rates: Commercial banks are charging 12 to 13 percent interest, despite the official policy rate standing at 11.5 percent.

What may happen next for Pakistani industry

The government may now face increased pressure to address these structural economic challenges to keep Pakistani industries competitive in international markets. As Baig indicated that the business community has already presented these specific concerns to federal leadership, it is likely that the government will be expected to weigh the demand for lower electricity and lending costs against its current fiscal strategy. Future policy adjustments could include a review of the PDL or potential incentives for the export sector, depending on how the administration prioritizes these industrial concerns against its revenue targets.