Budget Call Circular FY 2026-27 Issued
The Finance Division has officially initiated preparations for the federal budget by issuing the Budget Call Circular FY 2026-27. This circular sets out macroeconomic priorities, budget preparation timelines, and new fiscal directions for all federal ministries and Principal Accounting Officers. It marks the formal start of the budget process and provides a structured framework to align national economic goals with fiscal planning.
Along with the circular, the government released a provisional macroeconomic framework that outlines expected growth and inflation trends for the next two fiscal years. These projections aim to guide ministries in preparing realistic revenue and expenditure estimates while supporting economic stability and reform-oriented budgeting.
Key points highlighted include:
- Start of the federal budget preparation process
- Macroeconomic targets for growth and inflation
- Integration of climate and disaster considerations
You Can Also Read: BISP 8171 Web Portal Balance Check Before Withdrawal Using ATM
Macroeconomic Outlook Under Budget Call Circular FY 2026-27
The provisional macroeconomic framework projects gradual economic improvement over the coming years. According to the Finance Division, GDP growth is expected to increase from 4.0 percent in FY 2025-26 to 5.1 percent in FY 2026-27, reflecting recovery momentum supported by reforms and stabilizing global conditions.
Inflation is projected to remain moderate, with estimates of 6.1 percent for FY 2025-26 and 6.5 percent for FY 2026-27. These projections assume easing global commodity prices and improved domestic supply management, providing a more predictable environment for fiscal planning.
Macroeconomic assumptions include:
- GDP growth of 4.0 percent in FY 2025-26
- GDP growth of 5.1 percent in FY 2026-27
- Inflation between 6.1 and 6.5 percent
You Can Also Read: Punjab Aghosh Program 2025 Government Launches New Relief
Policy Directions Set by Budget Call Circular FY 2026-27
The Budget Call Circular FY 2026-27 provides clear policy instructions to federal entities regarding revenue generation and expenditure control. Ministries are required to submit actual figures, revised estimates, and future projections in line with defined fiscal priorities and accountability standards.
A major focus of the circular is the alignment of fiscal policy with long-term sustainability goals. By integrating climate and disaster considerations into routine budgeting, the government aims to ensure that public spending supports resilience and responsible growth.
Main policy directions cover:
- Improved fiscal discipline
- Transparent reporting mechanisms
- Climate-aware budgeting practices
You Can Also Read: Laptop Scheme Phase 3 Merit List 2025 Check Name In List
Introduction of Climate and Green Budgeting Framework
For the first time, the Budget Call Circular introduces detailed guidance on climate and green budgeting. This framework requires ministries to identify and tag revenues and expenditures that have environmental and climate relevance, ensuring better tracking and policy alignment.
The objective of this framework is to integrate climate resilience into fiscal planning while improving accountability. By clearly identifying climate-related financial flows, policymakers can better evaluate how public funds contribute to sustainability goals.
The green budgeting framework focuses on:
- Climate-linked tax and non-tax revenues
- Environment-related subsidies
- Disaster risk and recovery spending
You Can Also Read: BISP Kafalat 13500 Verification 8171 Portal For Payment Widrawal
Climate Tagging of Revenues
Under Budget Call Circular FY 2026-27, federal entities must now assess the climate relevance of both tax and non-tax revenues. Non-tax revenues will be evaluated based on the environmental impact of the activities they are linked to, such as resource use or pollution.
Levies on environmentally harmful activities, including fossil fuel consumption and hazardous waste, will be treated as positively correlated with climate objectives. This approach aligns Pakistan’s reporting standards with international green finance practices.
Revenue tagging categories include:
- Energy
- Transport
- Pollution
- Natural Resources
You Can Also Read: Ehsaas 8171 New Payment 2025 Start How to Check Status
Classification of Green-Related Revenues
To standardize reporting, the Finance Division has introduced four base categories for classifying green-related revenues. These categories help organize data and improve comparison with global benchmarks in climate budgeting.
Examples of such revenues include petroleum levies, motor vehicle charges, waste management fees, and charges on natural resource extraction. This classification allows clearer evaluation of how fiscal tools influence environmental outcomes.
Examples of green revenue sources are shown below:
| Category | Examples |
|---|---|
| Energy | Petroleum levies, emissions charges |
| Transport | Vehicle and road usage fees |
| Pollution | Waste and noise pollution charges |
| Natural Resources | Water and forest extraction levies |
Climate Tagging of Subsidies
The Budget Call Circular FY 2026-27 extends climate tagging to federal subsidies, which form a significant part of public spending. From FY 2025-26 onward, ministries must use a new assessment format to classify subsidies based on climate relevance.
This change enables the government to determine whether subsidies support climate adaptation or mitigation objectives. It also helps identify areas where fiscal support may unintentionally increase environmental risks.
Subsidy classification includes:
- Climate adaptation subsidies
- Climate mitigation subsidies
You Can Also Read: BISP 8171 Web Portal Registration Reopen For New Payment
Types and Impact of Climate-Related Subsidies
Climate adaptation subsidies focus on reducing vulnerability to climate risks. These include support for agriculture risk management, crop insurance, and climate-resilient infrastructure development.
Mitigation subsidies aim to reduce emissions and improve efficiency through clean energy, renewable power, mass transit, and electric vehicles. Subsidies are also assessed based on their environmental impact to ensure alignment with national goals.
Impact categories include:
- Directly favourable
- Indirectly favourable
- Neutral
- Mixed or potentially unfavourable
You Can Also Read: CM High-Tech Scheme Offers Interest-Free Loans Up To PKR 30 million For Farming Mechanization
Disaster Budgeting Under Budget Call Circular FY 2026-27
The Finance Division has reinforced instructions for disaster budgeting, recognizing Pakistan’s exposure to climate-induced disasters. Disaster-related spending will continue to be tagged across the federal budget for better monitoring and transparency.
This tagging covers both pre-disaster and post-disaster expenditures, ensuring a comprehensive view of how resources are allocated for prevention, response, and recovery.
Disaster budgeting includes:
- Risk reduction and preparedness
- Emergency response and recovery
You Can Also Read: Karachi Traffic Police Challan System 2025 New Rules Fines and Updates
Budget Preparation Timeline for FY 2026-27
The Budget Call Circular FY 2026-27 outlines a detailed timeline for the preparation and approval of the federal budget. Ministries are required to submit revised estimates and development project details by February 20, 2026.
Budget Review Committee meetings will be held from March 30 to April 12, followed by approval of exchange rate assumptions and the Budget Strategy Paper in April. Final budget documents are to be completed by the end of May.
Key milestones are summarized below:
| Activity | Timeline |
|---|---|
| Budget submissions | By February 20, 2026 |
| Budget Review Committee | March 30 – April 12, 2026 |
| Budget Strategy approval | By April 20, 2026 |
| Finalization of budget | End of May 2026 |
Coordination and Finalization Process
Meetings of the Annual Plan Coordination Committee will take place in the first week of May 2026, followed by the National Economic Council meeting in the second week of May. These forums ensure coordination between development planning and fiscal policy.
After approvals, budget ceilings will be issued, and quarterly estimates must be submitted by June 30, 2026. This structured process ensures timely completion and implementation of the federal budget.
Final coordination steps include:
- Issuance of budget ceilings
- Submission of quarterly estimates
- Alignment with national development plans
You Can Also Read: 8171 Web Portal Explained Simply: A Complete Guide for Families Seeking
FAQs
What is the Budget Call Circular FY 2026-27?
It is an official document issued by the Finance Division to start the federal budget preparation and set fiscal guidelines.
What GDP growth is projected for FY 2026-27?
The provisional framework projects GDP growth of 5.1 percent for FY 2026-27.
What is climate tagging in the budget?
Climate tagging identifies revenues and expenditures that have environmental or climate relevance.
Are subsidies included in climate tagging?
Yes, from FY 2025-26 onwards, subsidies are classified as climate adaptation or mitigation.
When will the federal budget be finalized?
All budget documents are expected to be finalized by the end of May 2026.
You Can Also Read: Phase II of Punjab Imam Honorarium Program Launched with Rs. 25,000 Monthly Support