ISLAMABAD: Members of the Senate from across the political spectrum voiced grave concerns on Monday over Pakistan’s escalating national debt and the absence of a clear strategy for economic stability.
The debate centered on the government’s budget for FY27, which earmarks a staggering Rs8,054 billion specifically for interest payments.
Senator Sherry Rehman, PPP vice president and parliamentary leader in the Senate, highlighted that debt servicing—comprising both principal and interest repayments—now consumes approximately 42.8 percent of the federal budget. She warned that such heavy obligations severely limit the government’s capacity for public investment, social protection, and critical development projects.
Senator Rehman also pointed to the systemic drain caused by state-owned enterprises (SOEs), noting that their losses reached Rs832.848 billion in FY2025, bringing cumulative losses to Rs6.563 trillion. Despite these failures, the current budget allocates an additional Rs451 billion to these entities, a structural issue she argued can no longer be ignored.
Advocating for comprehensive governance and expenditure reforms, she urged the rationalization of ministries and institutions to reduce operational costs. She further called for a transition toward a fair taxation system centered on direct taxes and a broader tax base, warning that an over-reliance on indirect levies burdens ordinary citizens and undermines fiscal sustainability.
Senator Rehman specifically flagged the ballooning Petroleum Development Levy as a point of concern and insisted that the government must integrate retail, trade, and service sectors into the tax net to expand fiscal space. She also lamented the shrinking budget for climate finance, noting the contradiction of collecting climate levies while reducing investments in a country highly vulnerable to climate change.
Leader of the Opposition in the Senate, Raja Nasir Abbas, delivered a sharp critique, claiming the budget fails to protect political independence and instead deepens Pakistan’s dependence on foreign economic control. He questioned whether the financial plan offers true economic freedom or merely pushes the country further into a “quagmire” of external dominance.
Abbas argued that the budget ignores the needs of the general population, stating that the common citizen is irrelevant in the government’s planning. He alleged that debt has surged exponentially since the current administration took office, warning that the rapid pace of borrowing is pushing the country toward “failed state” status.
Referencing the government’s own poverty thresholds, Abbas argued that millions more have fallen below the poverty line this year. He accused the government of shielding the wealthy while squeezing the poor through levies on essential fuel, while failing to cut its own expenditures.
The opposition leader also raised alarms regarding the depletion of strategic food security reserves and the lack of adequate investment in education. He further criticized the current political climate, alleging that politicians are being unfairly targeted as traitors while those who historically undermined the Constitution remain unpunished.
Concluding his remarks, Abbas accused the government of violating the 18th Amendment by pressuring provinces to surrender funds and called for an immediate cross-party dialogue to implement genuine reforms.
PTI Senator Mohsin Aziz also launched a scathing attack, alleging systemic rigging in recent general and Gilgit-Baltistan elections. He argued that the budget offers no tangible relief to the public, noting that while prices for essentials like wheat flour have skyrocketed, the national debt has ballooned from Rs44 trillion over 74 years to Rs97 trillion in the last four years alone.
Comparing Pakistan’s export performance unfavorably to India’s $440 billion, Senator Aziz stated that the country is moving backward. He criticized the Petroleum Development Levy and the rigid structure of electricity subsidies, which he claimed unfairly penalize low-income users who slightly exceed their quotas.
Senator Aziz also dismissed the concept of “non-filers” as a unique and problematic local construct. He emphasized that political stability is a prerequisite for development and urged the government to move away from IMF dependency to set the country on a sustainable growth trajectory, calling for a shift in policy from aggressive taxation toward public relief.