Finance Minister Muhammad Aurangzeb on Monday confirmed that the upcoming budget does not include any plan to increase the salaries of the armed forces more than those of civilian government employees, ensuring that Pakistan’s defense needs would still be fully met.
Speaking to reporters after a seminar, the minister said that while there were rumors about a special salary hike for the military, the government was only considering a general increase of 6–10% in line with the current low inflation rates.
Aurangzeb also said that India had tried to obstruct Pakistan’s $7 billion package, but these efforts failed. “There is no proposal to increase defense salaries beyond those of civilians,” he reiterated. Addressing the country’s broader defense requirements, he emphasized, “It’s about meeting the nation’s needs, not just the needs of the armed forces.”
Regarding external financing challenges, the finance minister said that despite India’s efforts to sabotage the IMF programme, Pakistan’s case was approved on merit because it met all quantitative and structural conditions. He noted that the IMF has been highly supportive and that “the entire nation has rightly celebrated the unity of our political and military leadership.”
Aurangzeb said that during the IMF talks, India tried to ensure key discussions did not happen, but Pakistan’s case ultimately prevailed. “We’re beyond that now,” he said.
At an event organized by Karandaaz Pakistan and the Pakistan Banks Association in Islamabad, Aurangzeb said the government is preparing “bold measures” for the upcoming FY2025–26 budget, due on June 10, aiming to take a more strategic approach beyond just balancing the books.
Responding to a question about the delay in IMF discussions, he said the main talks had concluded, with virtual follow-ups planned for next week. Reflecting on the past, he acknowledged that Pakistan has previously achieved macroeconomic stability but failed to sustain it. “We’ve fallen into consumption-led growth that caused balance of payment issues,” he said.
He emphasized the need for structural reforms to break the cycle of boom and bust. One area of reform is tax filing: Aurangzeb said the government aims to simplify the return process for salaried individuals by cutting the number of form items from 150 to nine, with plans to finalize this by the end of September.
On state-owned enterprises, the minister admitted that progress last year was limited but said reforms would be expedited in the new fiscal year. He shared optimism about completing the relaunch of the PIA transaction.
Discussing debt servicing, Aurangzeb noted that costs had decreased by Rs1 trillion due to lower interest rates, but stressed that the real goal was to modernize the debt management office in the coming year.
Finally, he expressed satisfaction at Pakistan’s economy crossing the $400 billion mark, describing it as a sign of positive momentum. However, he cautioned that to become a $3 trillion economy by 2047, Pakistan would need to tackle rapid population growth and climate change challenges.
