A recent update has revealed that the federal government is considering significant measures for the upcoming fiscal year Budget 2025-26. Notably, there may be a five-year levy imposed on petrol and diesel vehicles to support the promotion of electric vehicles (EVs). In addition, a dedicated EV fund is set to be established to facilitate the growth of electric mobility in the country.
The proposed budget aims to set a growth target of 4.2% for the GDP and 7.5% for inflation, with specific targets of 4.5% for agriculture and 4.4% for industrial sector growth. The services sector is also projected to grow by 4%. These estimates are currently under consultation with the IMF, with finalized figures expected soon, following virtual negotiations.
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Furthermore, the budget will include incentives for local manufacturing of laptops and smartphones’ batteries and chargers. The levy on petrol and diesel vehicles is anticipated to generate between 25 and 30 billion rupees annually over five years, amounting to roughly 125 to 150 billion rupees in total revenue. The funds collected from this levy will be allocated toward the five-year electric vehicle policy spanning 2026-2030.
The budget process involves multiple steps, including the finalization of the Medium-Term Budgetary Framework in a meeting of the Annual Planning Coordination Committee (APCC) on June 2, followed by approval from the National Economic Council and the presentation to Parliament by June 10. The upcoming fiscal year’s economic survey, scheduled for June 9, will analyze current performance and inform final budget approval.
Overall, the government aims to balance economic growth objectives with sustainable development incentives, aligning policies with IMF recommendations for maintaining strict fiscal and monetary discipline.
