The federal government has allocated Rs354.81 billion to State-Owned Enterprises (SOEs) for FY2025–26, reflecting an 80.3% increase from Rs196.83 billion last year. These funds, released under the Public Sector Development Programme (PSDP), will support key SOEs in infrastructure, transport, energy, and financial services—sectors critical to national development.
Finance Minister Muhammad Aurangzeb, in his budget speech, warned that loss-making SOEs continue to weigh heavily on public finances. He noted the annual burden exceeds Rs800 billion, and when factoring in subsidies, grants, and equity support, the fiscal impact surpasses Rs1 trillion. This scale of support is unsustainable and calls for urgent reform.
To address this, the government has completed categorisation of all SOEs through a cabinet committee. The entities have been divided into three groups—those to be restructured, privatised, or shifted to public-private partnership (PPP) models. Officials say this move will bring clarity and focus to reform efforts.
Several SOEs now have professionally appointed boards of directors, which aim to reduce political interference and boost efficiency. The finance minister emphasised that strong corporate governance and operational autonomy are necessary for these entities to function better and attract investment.
Privatisation is also a key part of the plan. High-priority cases like Pakistan International Airlines (PIA) and the Roosevelt Hotel in New York are expected to see progress this year. The government hopes these steps will reduce fiscal stress, modernise services, and create room for private sector participation in the economy.