The question of fiscal sustainability has long haunted the Federal Budget of Pakistan. As deficits have widened over consecutive years, reform efforts have been piecemeal and trivial at best, and counterproductive at worst. What Pakistan’s budgetary architecture requires, however, is a systematic overhaul. By contrast, the public debate on budgets in Pakistan often hinges on narrow line items and specifically politicised issues, leaving the larger problems untouched. To centre the analysis of Pakistan’s budget around larger structural areas of reform, the aim of this Working Paper is to disaggregate Pakistan’s Federal Budget (2024-25) and provide concrete recommendations across key areas of concern: federal-provincial fiscal federalism, domestic bank borrowing tendencies, public sector spending (Public Sector Development Programme), grants & subsidies, and transfers. The findings of the paper are that deep reforms are required, in the proper context, and that public discourse must recentre around those major areas of budget reform.
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