By Abdul Ghani

The federal government’s Running of Civil Government (RoCG) expenditure has been budgeted at Rs971 billion for the current fiscal year, reports Wealth Pakistan.

According to a Finance Division document, the civilian expenditure cited at around Rs7 trillion is factually incorrect. It explained that the RoCG, covering pay and allowances as well as operational expenses of ministries and divisions, is budgeted at Rs971 billion for FY2025-26.

The Division further stated that as a share of the total federal expenditure, the RoCG has declined over the years, dropping from around 9% in FY2016 to nearly 5% in FY2025, reflecting sustained fiscal consolidation efforts. A year-on-year comparison shows that the RoCG increased by 16%, from Rs839 billion in FY2024-25 to Rs971 billion in FY2025-26.

The employee-related expenditure (ERE) component increased from Rs538 billion to Rs587 billion — a 9% rise — mainly due to a 10% increase in pay and allowances and the December increment. Meanwhile, the operational expenditure (Non-ERE) climbed from Rs301 billion to Rs384 billion, marking a 28% increase.

The Finance Division attributed the higher operational costs to inflationary pressures and additional requirements of key departments, including the Federal Board of Revenue, the Ministry of Foreign Affairs, and the Combined Civil Armed Forces. The allocation for the Combined Civil Armed Forces increased from Rs232 billion to Rs274 billion, reflecting an 18% rise, driven by both employee-related and operational spending.

Despite the increase, the government said it has implemented austerity measures to contain and rationalise the recurring expenditure. These include restrictions on non-essential procurement of vehicles and equipment, limits on non-obligatory foreign travel, abolition of long-vacant posts, and stricter scrutiny of supplementary grants. A quarterly release strategy has also been introduced to regulate spending during the fiscal year.

The Finance Division maintained that while certain increases were unavoidable due to inflation and salary adjustments, overall civilian administrative expenditure remains controlled within the broader fiscal consolidation framework.

Credit: INP-WealthPk