Finance Division rejects claims of SOE financial deterioration, cites Rs35.8bn net fiscal inflow

The Finance Division responded to media claims suggesting a decline in net fiscal flow indicated a deterioration in State-Owned Enterprises (SOEs) financial health, asserting these are separate measures. In a press release, the ministry clarified that fiscal flows encompass transactions between the government and SOEs, including support and revenue collection, whereas SOE financial performance is evaluated through profitability and other indicators.

Profitable SOEs earned Rs423.3 billion in the first half of FY2025-26, while loss-making entities had losses contained at Rs342.8 billion, marking a positive progression under the SOE reform framework. SOEs contributed Rs839.8 billion to the government while government outflows were Rs804.0 billion, resulting in a net fiscal inflow of Rs35.8 billion.

The increase in outflows was attributed to equity injections, restructuring-linked financing, and debt management, despite a 26 percent rise in dividend receipts and a 10 percent increase in tax contributions. The ministry emphasized understanding net fiscal flow in the context of transaction timing and composition, not as a standalone measure of SOE performance.

The Finance Division stressed that SOE reform is progressing, citing closures of Utility Stores Corporation and Pakistan Agricultural Storage and Services Corporation, and privatisations of First Women Bank Limited and Pakistan International Airlines. Nine distribution companies are under privatization, and governance reforms aim at stronger governance, transparency, and commercial discipline, signaling a smaller SOE footprint and lower fiscal risk.