Prime Minister Shehbaz Sharif. Photo: Archive
ISLAMABAD:
At its meeting on Friday, the federal cabinet endorsed a number of key policy decisions, including moves to introduce a new system of local government in the capital and the formal ratification of previous committee decisions.
Chairing the meeting, Prime Minister Shehbaz Sharif underlined economic stabilization and continuation of reform as core priorities of the government. He stressed that the growth recorded in the first quarter of this year is a sign of renewed confidence.
The economy had moved from the brink of default to a more stable position, the prime minister said, addressing cabinet members. He reiterated the government’s commitment to restructuring loss-making state companies.
The Prime Minister highlighted the sale of majority stake in Pakistan International Airlines (PIA) as a turning point and said: “The privatization of PIA is an extremely important milestone in this regard.”
He expressed satisfaction that 75% of PIA shares had been privatized through a transparent bidding process, insisting that limiting losses in state entities was essential to a broader economic reform effort and to restore fiscal space.
Shehbaz also briefed the cabinet on his recent diplomatic rapprochement and described his meetings with UAE President Sheikh Mohamed bin Zayed Al Nahyan as extremely useful for bilateral relations. He said he had a “pleasant” call with Saudi Crown Prince Mohammed bin Salman in which both sides reviewed economic and strategic cooperation.
The ministers formally ratified the decisions taken by the Cabinet Committee on Legislative Cases (CCLC) in its meetings on December 3 and 30, 2025, including the procedures related to the Islamabad Capital Territory Local Government (Amendment) Ordinance, 2025, which will underpin the planned new local governance structure in the federal territory.
The cabinet further endorsed the resolutions of the Economic Coordination Committee session on August 26, 2025, including relief measures for consumers of electricity distribution companies under the off-grid (captive power plant) tax and a strategy to manage the implementation of the policy.
On the recommendation of the Petroleum Division, the cabinet approved a proposal to issue an ordinance to amend the Off-Grid Taxation (Captive Power Plants) Act, 2025, paving the way for third-party gas sales to off-grid captive power producers under a revised legal framework.
Meanwhile, the federal government, following the cabinet decision, decided to issue a Local Government Amendment Ordinance as a summary proposing the ordinance has been sent to the President for approval, sources said.
Sources indicated that the Punjab model will serve as a basis for holding local government elections under the new ordinance. The move reflects the government’s intention to rationalize local government structures before the next elections, they added.
