Opposition leader hails 20pc defence budget hike

Business Recorder

14-06-2025

ISLAMABAD: Opposition Leader Omar Ayub tore into the federal budget for 2025-26 on Friday, calling it a 'disaster' and 'Leila' budget – but gave a full-throated thumbs-up to the 20 per cent defence budget hike (minus military pensions), citing last month's tense showdown with India.
Opening the budget debate in the National Assembly, Ayub called the government's fiscal plan a 'Leila budget' – a term he used to suggest it was 'an illusion' – and accused the administration of presenting manipulated figures to mask economic deterioration.
Despite his criticism, Ayub endorsed the 20 per cent increase in the defence budget, including the Rs742 billion allocated for military pensions, bringing the total defence outlay to Rs3.292 trillion. He described the hike as 'totally justified' in light of recent border tensions and national security concerns.
He dismissed the government's reported 2.7 per cent GDP growth rate as 'fudged', citing figures from the Economic Survey of Pakistan that showed agricultural growth at just 0.6 per cent and industrial growth at -0.5 per cent. He argued that large-scale manufacturing had contracted more sharply than officially acknowledged.
He was also sceptical of livestock statistics, mocking a reported increase of 360,000 animals, including a rise of 100,000 donkeys, without a matching surge in mules. 'Where are the mules,' he quipped.
The opposition leader questioned the government's claim of a 23.7 per cent growth in the IT sector, suggesting that large industrialists had set up IT firms to exploit tax loopholes, while genuine technology companies were relocating abroad due to what he described as punitive tax measures.
Ayub painted a bleak picture of living standards, asserting that the proportion of Pakistanis living below the poverty line had climbed from 35 per cent to 45 per cent, with nearly 30 million people now classified as poor.
He said purchasing power had collapsed, noting that someone earning Rs50,000 in 2022 now effectively had the spending capacity of just Rs22,000.
Citing official statistics, he said wheat prices had surged by 50 per cent in three years, and 80 per cent of the planning budget remained unused or had lapsed.
The opposition leader criticised the government's decision to cut the Public Sector Development Programme (PSDP) budget from Rs1,400 billion to Rs1,100 billion, calling it a sign of weak governance.
He also pointed out that Rs8.207 trillion – nearly half of the Rs17.573 trillion budget – was earmarked for interest payments. He said this allocation underscored the government's misplaced priorities and undermined its claims of being pro-people.
Ayub accused the government of imposing heavy burdens on consumers, pointing to the hike in the petroleum development levy (PDL), which now stands at Rs100 per litre, compared with Rs20 during former prime minister Imran Khan's tenure.
He alleged a sharp rise in oil smuggling from Iran, claiming that around 2.17 billion litres of fuel – worth Rs550 billion – enter Pakistan illegally each year, resulting in an annual loss of Rs173 billion in PDL revenue.
He said the chairman of the Federal Board of Revenue (FBR), Rashid Mahmood Langrial, had admitted this issue during a parliamentary committee meeting.
While global oil prices were hovering around $64 per barrel, domestic petrol prices had jumped by roughly 70 per cent, from Rs149 to Rs253 per litre, Ayub said.
He also raised concerns about a 24 per cent decline in energy consumption, attributing it to prohibitively high electricity tariffs. He condemned new taxes on solar panels and criticised rising capacity payments, which he said had soared by 375 per cent under the current government.
The Special Investment Facilitation Council (SIFC), a military-backed initiative aimed at attracting foreign investment, also came under fire.
Ayub questioned the competence of its members and called on the government to disclose their educational qualifications to assess their suitability.
While acknowledging marginal progress in export performance, Ayub concluded by urging a revision of the National Finance Commission (NFC) Award to ensure a more equitable distribution of resources among Pakistan's provinces.
Taking part in the debate, Raja Pervaiz Ashraf of the Pakistan People's Party (PPP) acknowledged that the current administration had made politically unpopular decisions in an effort to stabilise the economy.
'These actions must be recognised,' he said, drawing a parallel to Pakistan's historical resilience. 'If we can win a war in four days, we can also fix our fragile economy – if we stand united.'
Ashraf defended the budget as appropriate given the prevailing economic conditions and praised Prime Minister Shehbaz Sharif for what he described as courageous leadership.
'The prime minister has sacrificed his political capital for the sake of the country,' he said, adding that borrowing from international institutions is a necessity for all governments, regardless of party affiliation.
The Minister for Parliamentary Affairs, Tariq Fazal Chaudhary, echoed the emphasis on economic reform, stating that the government is prioritising the creation of a favourable investment climate.
'We are implementing reforms across sectors to place the country on the path to sustainable development,' he added.
He said that the budget includes specific measures aimed at the development of Balochistan and assured the house that constructive suggestions from both government and opposition members would be considered.
Several parliamentarians, including Syed Hafeezuddin, Samina Khalid, Jamshed Dasti, Sheikh Aftab Ahmad, Syed Waseem Hussain, Yousaf Khan and Shahida Rehmani, took part in the ongoing budget debate.
While government allies praised the administration's management of a fragile economy amid political uncertainty, opposition members accused Prime Minister Sharif's government of following International Monetary Fund (IMF) directives at the expense of the poor, criticising what they described as the continuation of a 'Form 47-installed regime'.
Copyright Business Recorder, 2025