Government raises privatization revenue target after missing FY2025-26 goal by a wide margin.
ISLAMABAD: The Ministry of Finance has projected more than Rs160 billion in privatization proceeds during the fiscal year 2026-27 (FY2026-27), significantly raising its revenue expectations despite falling well short of its target in the previous fiscal year.
According to official budget documents, the government expects to generate over Rs160 billion through privatization transactions as part of its broader strategy to strengthen public finances, reduce debt, and advance structural economic reforms.
The projection follows a disappointing performance in FY2025-26, when privatization receipts totalled only Rs14.26 billion against a budget target of Rs86.55 billion, resulting in a substantial revenue shortfall.
Privatization central to reform agenda
The Finance Ministry said privatization remains a cornerstone of Pakistan’s economic reform programme, aimed at promoting sustainable economic growth, enhancing productivity, and addressing structural inefficiencies by expanding the role of the private sector.
According to the budget documents, the privatization programme is designed to foster greater competition, improve corporate governance, and attract private investment by reducing the state’s participation in commercial enterprises.
The government also seeks to promote deregulation and create a more business-friendly environment where private enterprises can deliver goods and services more efficiently.
Beyond asset sales
The ministry emphasised that privatization is not merely the sale of state-owned assets but forms part of a broader structural reform strategy intended to strengthen market competition, improve governance standards, and stimulate long-term economic development.
Officials believe that increasing private sector participation in key industries will enhance operational efficiency, encourage innovation, and improve the allocation of economic resources.
Legal framework
Pakistan’s privatization programme is governed by the Privatization Commission Ordinance, 2000, promulgated on September 28, 2000, which established the Privatization Commission to implement the federal government’s privatization policy.
Under Section 16(2) of the ordinance, privatization proceeds are earmarked for specific purposes. Ten per cent of the receipts must be allocated to poverty alleviation programmes, while the remaining 90 per cent is required to be utilised for the retirement of the federal government’s debt.
Supporting fiscal consolidation
The government expects higher privatization receipts in FY2026-27 to contribute to fiscal consolidation by reducing public debt, strengthening budgetary resources, and supporting the implementation of ongoing structural reforms aimed at improving Pakistan’s long-term economic performance.