Provincial Defense Support Backs Security Spending and Budget Relief

Finance Minister Muhammad Aurangzeb said Provincial Defense Support will help the federal government address key financial challenges in the next fiscal year. Speaking at a post-budget press conference, he said provinces provided more than Rs1 trillion in grants to the Centre. As a result, the government can strengthen security, manage economic risks, and maintain fiscal stability.

Defense Funding and Economic Challenges

Aurangzeb said the government has already reflected part of the provincial contribution in the new defense budget. He added that officials are discussing a three-year framework with provinces to continue the arrangement. The government increased defence spending by 18% due to growing regional uncertainty and security concerns.
The finance minister also highlighted the economic impact of tensions in the Middle East. He warned that disruptions to energy infrastructure could affect global supplies and increase inflationary pressures. Therefore, Pakistan must remain prepared for potential economic shocks during the next fiscal year.
In addition, the government allocated Rs430 billion as a financial buffer. This reserve will help absorb external pressures and protect the economy if unexpected challenges emerge. Aurangzeb said authorities will work to preserve these funds while pursuing revenue targets.

Relief Measures for Employees and Growth

The government approved relief measures worth more than Rs20 billion for federal employees. Officials merged previous ad hoc allowances into basic pay and announced a 7% salary increase. Consequently, many employees will receive a higher overall benefit.
Authorities also increased conveyance allowances and revised compensation packages for several departments. Police personnel, immigration officials, and other public servants will receive enhanced allowances under the new measures.
Meanwhile, the government continues discussions with the International Monetary Fund on tax relief proposals. Ministers described the budget as supportive of salaried workers, exporters, industries, and the construction sector. They believe these steps will encourage growth, create opportunities, and strengthen economic confidence. Overall, the government aims to balance fiscal discipline with public relief and national security needs.