Govt allocates nearly Rs355bn to SOEs under PSDP for FY26

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MG News | June 11, 2025 at 01:59 PM GMT+05:00

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June 11, 2025 (MLN): The federal government has allocated Rs354.81 billion to State-Owned Enterprises (SOEs) under the Public Sector Development Programme (PSDP) for the fiscal year 2025–26, an 80.3% rise from the Rs196.83bn set aside in the previous year.

The government remains committed to funding public enterprises for strategic and developmental purposes, even as broader SOE reforms remain under discussion.

Finance Minister Muhammad Aurangzeb, during the budget FY25-26 speech, emphasised that reforms in loss-making SOEs are already underway, alongside measures to reduce the burden on the national economy and attract investment.

He said SOEs had an annual burden of over Rs800bn on the national exchequer.

When government interventions such as subsidies, grants and equity injections are included, this figure exceeds Rs1 trillion annually.

“This is why SOE reforms are of utmost importance for fiscal discipline. The government has taken several important steps regarding SOEs,” Aurangzeb said.

He said that a key pillar of the SOE reform strategy involved categorising these entities to determine their future path, whether through ‘restructuring,’ ‘privatisation,’ or adoption of the public-private partnership (PPP) model.

This categorisation process has been completed by the relevant cabinet committee, he added.

The finance minister reiterated the government’s commitment to rightsizing and privatising these entities, with the process set to continue in the upcoming fiscal year 2025-26.

He said the government is working on a comprehensive privatisation plan to transform these SOEs into profit-oriented organisations.

In his budget speech, the minister also mentioned the privatisation of distribution companies, adding that professional boards have now been cleared of political interference.

Aurangzeb said the government is pursuing a modern and dynamic privatisation strategy aimed at enhancing public sector performance, reducing the fiscal burden and attracting investment.

The strategy emphasises transparent and efficient privatisation of non-essential public sector entities to boost competition, efficiency, and private investment, particularly in the energy and financial sectors.

The minister reaffirmed that in FY26, the government aims to complete key transactions such as the privatisation of Pakistan International Airlines (PIA) and the Roosevelt Hotel.

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