The World Bank has called on Pakistan to reform its tax system and widen the tax base, saying stronger revenue is vital for economic stability and long-term development. It also urged the country to use environmental measures, such as discouraging pollution, as new ways to generate funds while protecting natural resources.
Moreover, the report warned that groundwater levels across South Asia are falling fast, with Pakistan ranking among the world’s most water-scarce countries due to wasteful irrigation and poor farming methods. However, modern irrigation projects in Punjab have already saved 57 percent of water, while advanced farming techniques have boosted crop yields by 14 to 31 percent.
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At the same time, the report highlighted ongoing energy subsidy reforms in Pakistan, where electricity and gas support is now being linked to the Benazir Income Support Programme to better target needy households. This system aims to cut waste, reduce financial losses, and help control the growing problem of circular debt in the energy sector.
Furthermore, the World Bank suggested that fuel subsidies should be gradually shifted toward social protection programmes, so public money reaches low-income families instead of being lost through inefficient pricing. This approach would not only improve fairness but also create space for the government to invest more in health, education, and climate protection.
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The report also revealed that a new climate risk facility is being set up to support small businesses affected by floods and extreme weather, which have become more frequent. Such financial protection is expected to help small firms recover faster and protect jobs in vulnerable regions across the country.
Meanwhile, BISP has become more effective through digital systems, allowing quick support to millions of families during times of crisis, including 12 million households during the COVID-19 pandemic. With self-registration now available, Pakistan is moving toward a more modern, transparent, and responsive social safety system that supports both growth and resilience.