Prime Minister Shehbaz Sharif. Photo: File
ISLAMABAD:
At its meeting on Friday, the federal cabinet approved a number of important policy decisions, including steps to introduce a new local government system in the capital and the formal ratification of previous committee decisions.
Chairing the meeting, Prime Minister Shehbaz Sharif emphasized economic stabilization and continued reforms as the government’s key priorities. He emphasized that the growth in the first quarter of the current financial year was a sign of renewed confidence.
The economy had moved from the brink of default towards a more stable footing, the prime minister said while addressing cabinet members. He repeated the government’s promise to restructure loss-making state-owned enterprises.
Highlighting the sale of a majority stake in Pakistan International Airlines (PIA) as a turning point, the prime minister 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 tender process and insisted that limiting losses at state-owned entities was essential to the broader economic reform drive and to restoring fiscal space.
Shehbaz also briefed the Cabinet on his recent diplomatic outings and described his meetings with the President of the United Arab Emirates, Sheikh Mohamed bin Zayed Al Nahyan, as highly beneficial for bilateral relations. He said he had a “pleasant” call with Saudi Crown Prince Mohammed bin Salman, where both sides reviewed economic and strategic cooperation.
The ministers formally ratified decisions taken by the Cabinet Committee for Legislative Cases (CCLC) at its meetings on 3 and 30 December 2025, including 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 approved resolutions from the Economic Coordination Committee meeting on 26 August 2025, including relief measures for consumers of electricity distribution companies under the off-grid (captive power plant) charge and a strategy to manage the implementation of the policy.
Following the recommendation of the Petroleum Division, Cabinet approved proposals to issue an executive order to amend the Off-Grid (Captive Power Plants) Levy Act 2025, paving the way for third-party gas sales to off-grid tied power producers under a revised legal framework.
Meanwhile, following the Cabinet decision, the federal government has decided to issue a Local Government Amendment Ordinance as a summary proposing the ordinance has been sent to the President for approval, sources said.
The sources indicated that the Punjab model will serve as the basis for conducting local government elections under the new regulation. The move reflects the government’s intention to streamline local governance structures ahead of upcoming elections, they added.
