Govt institutions' deficit hit Rs833 billion in FY24–25, cabinet committee told

The Cabinet Committee on Public Enterprises chaired by Federal Finance Minister Muhammad Aurangzeb on Friday reviewed the annual performance of government institutions for the financial year 2024–25, as the Ministry of Finance presented a comprehensive report highlighting rising deficits, mounting debt and the need for urgent reforms.

According to the report, prepared by the Central Monitoring Unit (CMU) of the Ministry of Finance, the overall deficit of government institutions reached Rs833 billion during FY2024–25. Despite total income of Rs12,400 billion, the overall profit of state-owned enterprises (SOEs) declined by 13 percent, falling from Rs820 billion to Rs709 billion.

The ministry announced that while losses of loss-making institutions decreased slightly by 2 percent, government institutions collectively suffered a net loss of Rs123 billion. It noted that the bulk of losses were concentrated in a limited number of entities, particularly transport sector bodies and electricity distribution companies. The National Highway Authority was also listed among institutions incurring heavy losses, while persistent structural issues in power distribution companies were identified as a major concern.

The report revealed that the government provided support amounting to Rs2,078 billion to SOEs during the financial year, including increased equity injections aimed at reducing circular debt. A slight reduction in subsidies was also recorded. Government revenues included taxes, profits and interest on loans.

The total debt of government institutions has climbed to Rs9,570 billion, comprising both domestic and foreign loans. In addition, pension liabilities stand at around Rs2,000 billion and have been declared a major financial risk. Off-balance sheet guarantees were reported at Rs2,160 billion.

The committee decided to prioritize reforms in financially weak institutions and emphasized stronger financial discipline for loss-making entities. It was also agreed that ministries would be informed of the findings and issued directives on reform measures, with regular performance reviews to be conducted in the future.

The finance minister appreciated the Central Monitoring Unit for enhancing transparency, noting that the financial data of government institutions had been compiled in line with International Financial Reporting Standards (IFRS). He said the creation of a digital database would help in better decision-making.

The meeting emphasized full implementation of the SOE Act and directed that IFRS-based reporting be completed by February 2026. An indication was also given that action could be taken against institutions failing to complete audits on time.

The committee approved the publication of the annual performance report, terming it a significant step towards transparency and accountability. It also approved the appointment of independent directors in various state-owned entities, including several electricity distribution companies, as part of broader governance reforms.

The government reaffirmed its commitment to continuing reforms in SOEs, improving performance and tightening accountability across public sector enterprises.