ISLAMABAD: Pakistan has launched the second phase of Pakistan Hajj flight operations for pilgrims traveling under the government-sponsored scheme, state broadcaster Radio Pakistan reported on Thursday.
Over 89,000 pilgrims will travel under the government’s scheme during Pakistan’s 33-day-long Hajj flight operations, which started on April 29. Pilgrims will travel to Makkah and Madinah via 342 flights in total, with the last one departing from Pakistan on May 31.
On Wednesday, as the second phase of operations started, Minister for Religious Affairs and Interfaith Harmony Sardar Muhammad Yousaf received 305 pilgrims at Jeddah airport. They had arrived directly from Islamabad under the Makkah Route Initiative.
“Almost 46,000 pilgrims will arrive in Makkah via Jeddah by the 31st of this month,” Radio Pakistan reported. “They will then proceed to Madinah after performing Hajj.”
The Makkah Route Initiative is designed to streamline immigration processes by enabling pilgrims to complete official travel formalities at their departure airports. Initially tested in Islamabad in 2019, the program was later expanded to Karachi, benefitting tens of thousands of Pakistani travelers. This saves pilgrims several hours upon arrival in the Kingdom, as they can simply enter the country without having to go through immigration again.
Around 50,500 Pakistani pilgrims will travel to Saudi Arabia under the initiative this year. The scheme was launched in 2019 by the Saudi Ministry of Hajj and Umrah and has been implemented in five countries: Pakistan, Malaysia, Indonesia, Morocco and Bangladesh.
This year’s annual pilgrimage will take place in June, with nearly 89,000 Pakistanis expected to perform Hajj under the government scheme and over 23,620 Pakistanis through private tour operators.
ISLAMABAD: The head of an official delegation visiting London to present Islamabad’s position following a recent military standoff with New Delhi said on Tuesday the United States and the United Kingdom should encourage India to come for dialogue at a neutral location.
Weeks after their worst military confrontation in decades, India and Pakistan dispatched top lawmakers to press their cases in the United States, where President Donald Trump has shown eagerness for diplomacy between them. The Pakistan delegation is currently in London in the next stop of its mission and will go onwards to Brussels.
Gunmen on April 22 massacred 26 tourists on the Indian-administered part of Kashmir in the deadliest attack on civilians in decades in the scenic region that has seen a long-running insurgency and is disputed between India and Pakistan since 1947. India accused Pakistan of backing the assailants — which it denies — and launched strikes on Pakistani territory.
More than 70 people were killed in missile, drone and artillery fire on both sides for around four days before the US and other allies brokered a ceasefire on May 10. US secretary of state Marco Rubio also said at the time the two nations had agreed “to start talks on a broad set of issues at a neutral site.” He did not specify when the talks would take place or where.
“As part of our achieving this ceasefire, it was agreed at the time that going forward, we would have a dialogue at a neutral location, covering all friction points,” said Bilawal Bhutto Zardari, the head of the Pakistani delegation and the scion of the political Bhutto dynasty.
Bhutto Zardari, who was speaking to BBC Radio, said it seemed from recent statements by Indian leaders and actions of the government in New Delhi that they were not in favor of pursuing talks.
“We still believe that the United States and other allies can engage with India as a friend and explain to them that these decisions are not in their interest,” he said. “Similarly, here in the United Kingdom, you have a long history with India and Pakistan. [Disputed] Kashmir is the unfinished agenda of the partition [of India and creation of Pakistan in 1947] and forms the root cause of our conflict.
“Your [UK] government too is well-placed to speak to the Indian government as a friend and explain to them that refusing to engage with their neighbor, for two nuclear-armed countries to have no dispute resolution mechanism, is not in anybody’s interest.”
Separately, Bhutto Zardari led Pakistan’s delegation in a discussion with the Financial Times Editorial Board in London.
“We reaffirmed Pakistan’s abiding commitment to peace, emphasizing that dialogue, not domination, remains the only sustainable path forward with India,” the leader wrote on X.
“Expressed grave concern over the erosion of strategic stability: India’s violations of the Indus Waters Treaty, the weaponization of water, and the dangerous descent toward conflict in a nuclearized region, a trajectory that threatens to condemn future generations to perpetual insecurity.”
Led Pakistan’s high-level delegation in a substantive engagement with the Financial Times Editorial Board in London. We reaffirmed Pakistan’s abiding commitment to peace, emphasizing that dialogue, not domination, remains the only sustainable path forward with India. Expressed…
— BilawalBhuttoZardari (@BBhuttoZardari) June 10, 2025
ISLAMABAD: Pakistan announced significant income tax relief for the salaried class on Tuesday as it announced its federal budget for the fiscal year 2025-26, aiming to ease the burden on working people amid high inflation and economic uncertainty.
Pakistan’s tax-to-GDP ratio remains below 10%, among the lowest in the region. The government has pledged to raise this ratio to 14% through tax reforms, digital enforcement, and expanding the tax base.
“First of all, we are providing relief where it is most needed, relief for the salaried class,” Finance Minister Muhammad Aurangzeb, presenting his first full-year budget in the National Assembly, said.
“In this regard, there is a proposition for a significant reduction in the income tax slabs for the working class.”
Aurangzeb said the income tax rate for individuals earning between Rs600,000 and Rs1.2 million ($2,128–$4,255) annually would be cut from 5% to 2.5%.
“For those earning up to Rs22,000,000 [$7,788], the tax rate has been proposed at 11% instead of 15%. Similarly, those who earn a higher salary, there is a proposition of tax reduction,” the finance minister said.
“For those who are earning between Rs22,000,000 [$7,788] up to Rs32,000,000 [$11,328], the tax rate has been proposed to be reduced from 25% to 23%.”
For high-income earners making over Rs10 million ($35,460) annually, a 1% reduction in the additional surcharge has been recommended to help curb the ongoing brain drain, the minister said.
Aurangzeb described the changes as part of broader efforts to simplify the tax structure and “strike a balance between inflationary pressures and take-home pay.”
The federal budget, with a total outlay of Rs17.57 trillion ($62 billion), comes as Pakistan seeks to stabilize its economy under a $7 billion International Monetary Fund (IMF) bailout program approved last year.
The budget also includes a 20% increase in defense spending, while total government expenditure is expected to be 7% lower year-on-year compared to the last fiscal, reflecting fiscal consolidation goals tied to IMF negotiations.
The proposed budget will be debated in parliament before final approval.
ISLAMABAD: Pakistan will increase defense spending by more than 20% in the 2025-26 fiscal year to Rs2.55 trillion ($9.04 billion) as it seeks to bolster military capabilities following the country’s worst confrontation with India in nearly three decades.
The move comes as the government unveiled a Rs17.57 trillion ($62 billion) federal budget on Tuesday, reflecting a 7% decrease in overall spending compared to the current fiscal year. The largest portion of the budget – Rs8.21 trillion ($29 billion), or nearly half of total expenditures – will go toward debt servicing, continuing to strain Pakistan’s fiscal space.
“National defense is the most important priority of the government,” Finance Minister Muhammad Aurangzeb said while presenting his first full-year budget in the National Assembly. “For this national duty, Rs2,550 billion [$9.04 billion] will be allocated.”
Pakistan’s defense budget for the outgoing fiscal year stood at Rs2.12 trillion ($7.44 billion). The increase comes weeks after a four-day military standoff with India in May, which erupted following an attack in Indian-administered Kashmir that left 26 Hindu pilgrims dead. New Delhi blamed Pakistan-backed militants, a charge Islamabad denied.
The two nuclear-armed neighbors exchanged missile, drone, artillery, and air strikes before agreeing to a ceasefire on May 10.
Aurangzeb said the budget was being presented “at a very important and historic moment when the nation in recent days showed extraordinary unity, determination and strength.”
“After the Pak-India war, India has threatened to block the flow of river water into Pakistan. India is trying to use water as a weapon. I want to make it clear that water guarantees Pakistan’s survival and no hindrance will be tolerated in this respect,” the finance minister added.
Fiscal consolidation under IMF watch
Pakistan remains under a $7 billion IMF loan program approved last year, and the budget reflects an attempt to balance security concerns with ongoing fiscal reform efforts.
The government has set a GDP growth target of 4.2% for the next fiscal year, while aiming to reduce the fiscal deficit to 3.9% of GDP. The economy grew just 2.6% in 2024/25, falling short of its 3.6% target due to weak agriculture and industrial output. Inflation is projected at 7.5%.
Security personnel shift boxes with copies of the 2025–26 fiscal budget outside the Parliament House in Islamabad, before the start of the budget session. (APP)
In a May 23 statement, the IMF said Pakistan had pledged to maintain fiscal consolidation while safeguarding “social and priority expenditures,” targeting a primary surplus of 1.6% of GDP in 2025/26.
Aurangzeb said the new budget aimed to “change the DNA of our economy” by boosting exports, building foreign exchange reserves, and promoting productivity to avoid recurring balance of payment crises.
Bridging the gap
The government expects total revenues of Rs11.1 trillion ($39 billion), leaving a Rs6.5 trillion ($23 billion) financing gap to be filled through domestic and external borrowing, as well as privatization proceeds. Privatization is expected to bring in Rs87 billion, while Rs106 billion ($376 million) is projected from foreign sources.
The Federal Board of Revenue (FBR) has been tasked with collecting Rs14.1 trillion of the projected Rs19.3 trillion in gross revenue, marking a 19% year-on-year increase.
Corporate employees watching television screens during presentation of Pakistan’s $62 billion federal budget for fiscal year 2025–26, in Islamabad. (APP)
Under the Public Sector Development Program (PSDP), Rs1 trillion ($3.5 billion) has been allocated, with Rs328 billion ($1.16 billion) earmarked for transport infrastructure projects. The government also set aside Rs113 billion ($399 million) for education and Rs32 billion ($113 million) for health care.
Aurangzeb also announced plans to grow IT exports to $25 billion over the next five years and forecast a rise in workers’ remittances to $38 billion by the end of the current fiscal year.
Mixed reaction from markets
The budget drew mixed reactions from analysts and market participants.
Muhammad Waqas Ghani, head of research at JS Global Capital Ltd., said the proposals prioritized “tax reduction, energy sector changes, and austerity” in line with the last two budgets.
He noted the construction sector was favored, while the auto industry was the most negatively affected.
“On equities, CGT (capital gains tax) remains at 15%, but income from loans will be taxed at 25% to encourage mutual funds to divert their funds toward the equity asset class,” Ghani said.
An elder man listening the 2025-26 federal budget speech live on his mobile phone at a roadside in Islamabad. (APP)
Amreen Soorani, head of research at Al Meezan Investment Management, said the budget proposals were largely in line with market expectations.
“While there are some discernible disparities in the taxation of various asset classes, the initial reaction from the listed equity market appears to be one of cautious optimism,” she told Arab News.
However, the Overseas Investors Chamber of Commerce and Industry (OICCI), which represents over 200 multinational companies in Pakistan, expressed disappointment, urging the government to overhaul tax structures to improve competitiveness and attract foreign investment.
ISLAMABAD: Pakistan’s Prime Minister Shehbaz Sharif on Tuesday urged world powers to take immediate action to end Israel’s military offensive in Gaza, saying he hoped innocent Palestinians would achieve their dream of freedom soon.
Over 54,000 Palestinians have been killed and much of the coastal enclave of Gaza devastated since Israel’s latest air and ground offensive began in October 2023, health authorities in Gaza say.
“The oppression, cruelty and barbarism taking place in Palestine and Kashmir — no matter how much we condemn it, it is not enough” Sharif said while addressing a federal cabinet meeting.
“But I believe this is a very critical time for the global powers to effectively use their influence to ensure a ceasefire in Palestine, because what is happening there is the shedding of innocent Muslim blood — the blood of little girls, children and parents.”
The Pakistani PM added:
“I have strong hope in Allah Almighty, God willing, that the people of Palestine will gain freedom, the people of Kashmir will gain freedom. They have made tremendous sacrifices.”
Pakistan has been calling for a ceasefire and unimpeded humanitarian access to Gaza since the latest war broke out.
Pakistan, which does not recognize Israel, has for decades called for the establishment of an independent Palestinian state based on pre-1967 borders, with Al-Quds Al-Sharif as its capital.
Although nearly 150 countries have recognized Palestine statehood, most major Western powers including the United States, Britain, France, Germany and Japan, have not.
Muslim countries that do not recognize Israel include Pakistan, Saudi Arabia, Iran, Iraq, Syria and Yemen.
ISLAMABAD: The Pakistan Stock Market witnessed a range-bound session today, Tuesday, with the index fluctuating within a narrow band amid uncertainty surrounding the budget announcement.
Pakistan will unveil its annual federal budget for the coming fiscal year on Tuesday evening, seeking to kickstart growth while finding resources for an expected hike in defense expenditure following a military conflict with India last month, the worst between the nuclear-armed neighbors in decades.
Islamabad will also have to contend with remaining within the discipline of its International Monetary Fund program and the uncertainty from new trade tariffs being imposed by the United States, its biggest export market.
“The index recorded an intraday high of 970 points and a low of 51 points, eventually closing at 122,024 — gaining 383 points or 0.32 percent,” brokerage house Topline Securities said in its daily market review.
“Market participation remained healthy, with total traded volume reaching 591 million shares and a traded value of PKR 21 billion.”
Media reports say the government is likely to present a 17.6 trillion rupee ($62.45 billion) budget for the fiscal year beginning July 1, down 6.7 percent from this fiscal year. It has projected a fiscal deficit of 4.8 percent of GDP, against a targeted 5.9 percent deficit in 2024-25, the reports say.
Analysts said they expect an increase of around 20 percent in the defense budget, likely offset by cuts in development spending.
Pakistan allocated 2.1 trillion Pakistani rupees($7.45 billion) for defense in the outgoing fiscal year, including $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defense budget.
The government of Pakistani Prime Minister Shehbaz Sharif has projected 4.2 percent economic growth in 2025-26, saying it has steadied the economy, which had looked at risk of defaulting on its debts as recently as 2023. Growth this fiscal year is likely to be 2.7 percent, against an initial target of 3.6 percent set in the budget last year.
Pakistan’s growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8 percent and 6.0 percent growth is expected in 2025, according to the Asian Development Bank.
