ISLAMABAD: Pakistan is likely to allocate Rs1.453 trillion to its armed forces in the next federal budget, reported the local media on Sunday, indicating about six percent increase which still does not completely account for the average inflationary pressure of 11.3 percent in the national economy.
The government is scheduled to present the next annual budget on Friday, June 10, as its forex reserves have sharply declined to $9.7 billion amid a widening current account deficit and double-digit inflation.
Pakistan is striving for a staff-level agreement with the International Monetary Fund (IMF) for the resumption of a loan program amounting to $6 billion since it desperately needs external finances.
As the government finalizes details of the next federal budget, the country’s defense spending has also come under scrutiny under the prevailing economic context.
“The armed forces are likely to be allocated Rs1.453 trillion in the budget for the next fiscal year, which would be about Rs83 billion higher than the outgoing year’s allocation of Rs 1.37tr, an increase of almost six percent,” reported Dawn newspaper after talking to defense sources.
“This year a Rs136bn raise was expected after taking into account an average of 11.3pc inflation for the outgoing year,” it added. “Therefore, in number terms, the armed forces would be getting about Rs53bn less than what they say was needed for coping with inflation.”
Much like the outgoing year, the newspaper informed, the defense budget was likely to be about 16 percent of the total outlay, though the share was expected to go down in GDP terms from 2.54 to 2.2 percent in the next fiscal year.
Dawn said that Pakistan’s per soldier spending stood at about Rs2.65 million per annum which was “not even one-third of what India spends.”
The report also noted that the armed forces and their welfare entities paid Rs935 billion in taxes in the outgoing fiscal year, adding that the army saved and returned Rs500 million to the government from COVID-19 allocation and $16.9 million against procurements.
