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Pakistan's budget under fire as inequality widens

Activists and economists in Pakistan criticised the federal budget and development policies, warning of rising inequality and displacement.

News Arena Network - Islamabad - UPDATED: June 20, 2026, 05:01 PM - 2 min read

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Pakistani Prime Minister Shehbaz Sharif speaks during a Parliament session in Islamabad. (Image credit: AP)


A coalition of political leaders, economists, trade union representatives, academics and community activists has criticised Pakistan's economic and development policies, arguing that widening inequality and the displacement of vulnerable communities are fuelling growing public dissatisfaction.

 

The concerns were raised during a roundtable discussion organised by the Awami Workers Party-Marxist (AWP-M) at Islamabad's National Press Club, according to a report by Dawn newspaper.

 

Participants contended that Pakistan's political and economic systems increasingly benefit powerful elites while placing a disproportionate burden on working-class communities and low-income households.

 

A major focus of the discussion was the ongoing demolition of informal settlements in Islamabad. Speakers argued that thousands of residents who contributed to building and sustaining the capital city are now facing eviction and uncertainty.

 

Political economist Dr Aasim Sajjad Akhtar said authorities continue to prioritise large-scale real estate projects while displacing workers who provide essential services and support the city's economy.

 

The recently announced federal budget also drew criticism. Ayoub Malik, President of the National Party's Punjab chapter, said the burden of economic adjustment measures continues to fall heavily on salaried employees.

 

Referring to Pakistan's debt obligations, Malik noted that more than Rs 8.2 trillion has been allocated for debt servicing. He argued that ordinary citizens would ultimately shoulder the economic cost through taxation and reduced public spending.

Also read: Indus Waters Treaty: Pak Deputy PM writes to UNSC

 

He also criticised the fixed tax regime for traders and retailers, alleging that it favours influential business interests while salaried workers remain subject to significant tax burdens.

 

Former senator Farhatullah Babar warned against relying on coercive measures to address political and social grievances, arguing that such approaches have repeatedly failed to resolve underlying issues.

 

Babar also expressed concern over widening wealth disparities, claiming that existing economic policies are increasingly transferring resources from poorer sections of society to more powerful groups.

 

AWP leader Alia Amirali questioned why legislative changes could be introduced to accommodate affluent interests but not to safeguard vulnerable residents living in katchi abadis, or informal settlements.

 

Meanwhile, CDA Workers Union Chairman Izzat Kamal Pasha challenged the rationale behind declaring long-established settlements illegal despite the existence of mechanisms intended to manage and regularise such communities.

 

Participants also voiced concern about what they described as shrinking democratic space, restrictions on dissent and growing pressure on activists advocating for marginalised groups.

 

The discussion reflected broader concerns among some political and civil society groups over economic inequality, urban development policies and the social impact of fiscal reforms in Pakistan.

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