Pakistan announces 50% allowance for army officers

Pakistan’s federal government has announced a 50 percent special relief allowance for commissioned officers of the armed forces and a 20 percent allowance for junior commissioned officers (JCOs) and soldiers starting next fiscal year.

Finance Secretary Imdad Ullah Bosal announced during a briefing to the National Assembly Standing Committee on Finance, chaired by Syed Naveed Qamar.

Finance Minister Muhammad Aurangzeb also outlined key aspects of the upcoming budget, focusing on structural reforms, debt management, and economic stabilization.

“There is no mini-budget,” Aurangzeb told the committee, rejecting widespread speculation. He said the government had not presented any supplementary budget during the outgoing fiscal year.

The finance minister said Pakistan expects to receive $2 billion in commercial loans this month. Half of the amount is likely to come from the Asian Development Bank (ADB).

Aurangzeb added that the government plans to issue a Panda bond by the end of the month. It will also float Euro and Sukuk bonds in the next fiscal year.

He confirmed that Pakistan is prepared to meet its foreign debt obligations, including a $500 million Eurobond repayment in September and $1.2 billion in March/April 2026.

The minister reaffirmed the government’s commitment to privatization, saying Pakistan International Airlines (PIA), the Roosevelt Hotel in New York, and three electricity distribution companies (DISCOs) will be privatized in the next fiscal year.

He said the Utility Stores Corporation, which he described as a loss-making and corruption-prone entity, will be downsized under structural reforms.

Aurangzeb also announced that the government has proposed PKR 312 billion in new taxes. It expects to collect PKR 11,900 billion in tax revenue during the current fiscal year.

In a move to support local industry, he said duties on more than 7,000 tariff lines—mainly raw materials—have been reduced or eliminated.

“This is a historic step,” he said, referring to the tariff reforms aimed at supporting industrial growth.

However, opposition lawmakers, including Omer Ayub, criticized the heavy reliance on indirect taxes and growing powers of the Federal Board of Revenue (FBR).

“If you give FBR unchecked powers, tomorrow even you could be arrested,” Ayub warned during the session.

The finance minister praised provincial governments for maintaining a primary budget surplus and said MoUs are being signed to formalize these targets.

Minister of State Bilal Kiani informed the committee that the budget for the Benazir Income Support Program (BISP) has been increased from PKR 460 billion to PKR 716 billion. The program now benefits over 10 million families.

Aurangzeb also announced a graduation initiative for BISP women beneficiaries to help them achieve financial independence.