Farooq Awan

Net fiscal returns generated by Pakistan’s state-owned enterprises (SOEs) for the federal government declined sharply during fiscal year 2025, falling by 91 percent to Rs40.7 billion, according to the Federal State-Owned Enterprises Annual Aggregate Report FY2025.

The report shows that the net fiscal flow — calculated as the difference between SOEs’ total financial contributions to the government and the fiscal support they receive — dropped from Rs458.2 billion in FY2024 to just Rs40.7 billion in FY2025.

SOEs’ total contributions to the national exchequer amounted to Rs2,119.2 billion during the year. These inflows comprised dividends, taxes, levies, royalties, development surcharges and interest payments made by the enterprises to the government.

At the same time, total fiscal support extended to SOEs reached Rs2,078.5 billion, including equity injections, loans, grants, subsidies and other transfers. The narrow difference between inflows and outflows resulted in the reduced net fiscal movement recorded for the year.

The report also presents the Fiscal Efficiency Index (FEI), which measures the total inflows from SOEs relative to the government’s fiscal support. The index declined from 1.30 in FY2024 to 1.01 in FY2025. According to the index calculation, SOEs returned Rs1.01 to the government for every Rs1 of fiscal support received during the fiscal year.

The breakdown of SOE contributions shows that dividend payments rose to Rs149.6 billion from Rs82.8 billion a year earlier. Tax revenues collected from SOEs increased by 17 percent to Rs436.9 billion. Non-tax revenues, which include royalties, levies and other statutory charges, decreased by 10 percent to Rs1,264.9 billion from Rs1,400.5 billion.

Interest payments on government loans to SOEs increased significantly, rising from Rs115.0 billion to Rs267.8 billion during the year. The report notes that total fiscal support comprised Rs728.9 billion in equity injections, Rs354.1 billion in loans, Rs726.3 billion in subsidies and Rs269.2 billion in grants, along with other capital transfers and support measures.

The net fiscal movement figure represents the residual balance after accounting for both contributions and support. Data compiled in the report covers SOEs operating across several sectors, including financial services, oil and gas, power, infrastructure and transport, manufacturing, mining and engineering, industrial estate development, and trading and marketing.

The figures are presented as part of the federal government’s annual consolidated review of fiscal exposure and financial performance of state-owned enterprises for the fiscal year ended June 2025.

Credit: INP-WealthPk