ISLAMABAD: The Ministry of Commerce (MoC) on Wednesday informed a Senate panel that it is prepared to manage its affairs even with a 50 per cent cut in its non-development budget for fiscal year 2026-27, citing growing financial constraints due to the evolving situation in the Middle East.
Testifying before the Senate Standing Committee on Commerce, chaired by Senator Anusha Rahman, Secretary Commerce Jawad Paul said the government had already curtailed non-Employee Related Expenditure (non-ERE) budgets of ministries by 20 per cent in fourth-quarter releases for the current fiscal year 2025-26, adding that his ministry was already bracing for further tightening.
Senator Saleem Mandviwala, however, expressed concern over the government’s fiscal space, noting that an Rs 80 billion subsidy had recently been provided on petroleum products. He warned that, given the country’s fragile financial position, the government may not be able to meet budgetary demands for 2026-27.
Responding to the concerns, the Commerce Secretary said the ministry would prepare its expenditure plans even if its budget is slashed by up to 50 per cent. “I am mentally prepared for it,” he remarked, adding that only a modest 9 per cent increase has been sought for the upcoming fiscal year compared to 2025-26.
The Ministry has proposed a total budget of Rs 1.707 billion under ERE and non-ERE heads for FY2026-27, up from Rs 1.562 billion in the current fiscal year.
For the Trade Development Authority of Pakistan (TDAP), the Ministry has sought Rs 9.951 billion for FY2026-27 — a sharp increase of 283 per cent compared to Rs 2.6 billion allocated for 2025-26. Of the current allocation, Rs 1.811 billion had been released by March 31, 2026, of which Rs 1.625 billion — about 90 per cent — had already been spent by March 21.
Explaining the steep increase, the Commerce Secretary said the abolition of the Export Development Surcharge (EDS) necessitated higher budgetary support to maintain competitiveness with regional players. The decision to abolish EDS was taken on the recommendations of a committee constituted by the Prime Minister.
The Committee expressed reservations over whether the government would be able to meet TDAP’s enhanced funding requirements amid the ongoing fiscal crunch. It recommended that TDAP submit its annual business plan to the Board of the Export Development Fund (EDF) by April 2026, so that allocations could be aligned with available fiscal space.
The Secretary Commerce directed TDAP officials to ensure submission of the business plan by April 30, 2026, and secure approval from the EDF Board. The Committee further recommended that TDAP participate only in those international exhibitions that can be financed through EDF resources rather than the federal budget.
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The proposed allocations for other entities include Rs 248 million for the Pakistan Institute of Trade and Development (PITAD), Rs 142 million for the Directorate General of Trade Organisations (DGTO), Rs 415.5 million for the Trade Dispute Resolution Organisation (TDRO), and Rs 914 million for the National Tariff Commission (NTC). Additionally, Rs 20 billion has been proposed under EDF, Rs 12.158 billion for DLTL and TUFF schemes, and Rs 7.427 billion for trade missions abroad.
The Committee approved the proposed budgetary demands for the Ministry and its attached departments and entities.
It also approved Rs 4.83 billion for the Quetta Expo Centre, subject to relocation. Senator Mandviwala informed the Committee that Balochistan Chief Minister Sarfraz Bugti had agreed to construct the Expo Centre at a location recommended by the Committee.
The Committee has invited the Chief Minister to attend its meeting on March 31, 2026 — either in person or via video link — to resolve the dispute over the project’s location, as lawmakers from Balochistan have opposed the current site.
The Committee also urged the provincial government to allocate land for the Expo Centre from the 125 acres already available with the National Disaster Management Authority (NDMA), although the Commerce Secretary expressed reluctance to pursue the matter jointly with NDMA.
Furthermore, the Committee directed the Ministry to place the “Export Accelerator for SMEs” project before the EDF for funding instead of the Public Sector Development Programme (PSDP), for which Rs 3 billion has been sought in the upcoming budget.
Copyright Business Recorder, 2026