The Pakistan government has allotted trillions to its defence spending despite suffering from an economic crisis. (Image: Reuters)
The Pakistan government led by Shehbaz Sharif has presented a ‘populist’ budget despite the country suffering from an economic crisis.
The Pakistan government will spend PKR 1.804 trillion on defence over the next year, the Dawn reported. The new amount is around 13% higher than the revised allocation for the current year, the report said.
It also highlighted that the defence budget makes up nearly 1.7% of the GDP and 12.5% of the total expenditure planned by the government for the next year.
The allotment was higher despite international lender, the International Monetary Fund (IMF), urging the government to cut down defence spending in February or raise the GST rate to 25% on consumer goods for additional revenue in February, according to a report by CNN-News18.
The Pakistani government, according to the report, slapped 25% GST on dozens of consumer goods to meet IMF’s demand but did not decrease defence spending.
Pakistan allotted PKR 1.57 trillion for defence last year, but they revised it later to PKR 1.59 trillion.
The Pakistan army received PKR 825 billion of the total budget, followed by the nation’s air force PKR 369 billion and the navy, which received 189 billion. The government also increased the pension of retired military officials by 26%.
The report by Dawn said that the military’s pension are not part of the defence budget and items like budget for strategic nuclear arsenals as well as defence-related procurements and strategic programmes are not itemised in the budget.
Pakistan’s defence budget allocation includes funds for defence administration, employee expenses, operating expenses, physical assets, and civil works.
The defence budget allotted PKR 5.4 billion for defence administration, 705 billion for employee costs, 442 billion for operating expenses, 461 billion for physical assets and 195 billion for civil works.
The government’s step to increase the defence budget as well as raise the salaries and pensions of all government employees is being seen as ‘populist’ measures enacted by the government keeping elections in mind.
“No new tax is being imposed this year, and the government has tried to provide as much relief as possible,” Ishaq Dar, Pakistan finance minister said, before presenting the budget on Friday.
He also appeared confident on Friday that Pakistan has overcome its economic vulnerability. Dar also said that Pakistan will not default.
Dar and his boss, Prime Minister Shehbaz Sharif, are hoping that the budget will help them to access the locked bailout fund from the International Monetary Fund (IMF). The Pakistan government believes that the budget is in line with IMF’s expectations.
(PKR – Pakistani rupee)
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