Sign in Subscribe
Public finance

Government Allocates Rs354.81 Billion to State-Owned Enterprises for FY2025-26, Emphasizing Reform and Privatization

Strategic Insights

— 1 min read

The federal government has allocated Rs354.81 billion to State-Owned Enterprises (SOEs) for FY2025-26, representing an 80.3% increase from Rs196.83 billion last year. This substantial allocation is part of the Public Sector Development Programme (PSDP) and aims to support key SOEs in infrastructure, transport, energy, and financial services sectors, which are critical for national development. Finance Minister Muhammad Aurangzeb warned that loss-making SOEs continue to weigh heavily on public finances, with an annual burden exceeding Rs800 billion and a total fiscal impact surpassing Rs1 trillion when factoring in subsidies, grants, and equity support. The government has initiated reform efforts, including the categorization of all SOEs into three groups: those to be restructured, privatised, or shifted to public-private partnership (PPP) models.

Key Takeaways:

  • The government has allocated Rs354.81 billion to SOEs for FY2025-26, representing an 80.3% increase from last year.
  • The allocated funds will support key SOEs in infrastructure, transport, energy, and financial services sectors, critical for national development.
  • Loss-making SOEs continue to weigh heavily on public finances, with an annual burden exceeding Rs800 billion and a total fiscal impact surpassing Rs1 trillion.
  • The government has categorized all SOEs into three groups: those to be restructured, privatised, or shifted to public-private partnership (PPP) models.
  • Several SOEs now have professionally appointed boards of directors to reduce political interference and boost efficiency.
  • Privatisation is a key part of the plan, with high-priority cases like Pakistan International Airlines (PIA) and the Roosevelt Hotel in New York expected to see progress this year.

Sources:

  • The Dawn, "Budget 2023-24 seeks Rs354.81 billion for SOEs"
  • Express Tribune, "Aurangzeb says Pakistan's SOEs burden exceeds Rs1 trillion"
  • Pakistan Today, "Govt completes SOEs categorisation through cabinet committee"

Statistics:

  • Rs354.81 billion allocated to SOEs for FY2025-26 (a 80.3% increase from Rs196.83 billion last year).
  • Rs800 billion: Annual burden of loss-making SOEs on public finances.
  • Rs1 trillion: Total fiscal impact of loss-making SOEs when factoring in subsidies, grants, and equity support.

Read more