Spending

Pakistan increases defense budget to Rs 1,523 billion; increases expenses by 11%

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Pakistan spent 1.37 trillion rupees on defense spending last year.

Strong points

  • Pak’s defense budget is the second largest annual expense item after debt payments
  • Last year, the country spent Rs 1.45 trillion on defense spending
  • Pak’s finance minister presented an annual budget of Rs 9.502 billion to parliament for the financial year 2022-23

Pakistan on Friday announced it would allocate 1.523 billion rupees to defence, an increase of more than 11% from last year, as Finance Minister Miftah Ismail presented an annual budget of 9.502 billion rupees in Parliament for the financial year 2022-23.

Estimates showed that defense spending was the second largest component of annual spending after debt repayment. Total current expenditure for next year would be Rs 8.694 billion, 15.5% higher than last year’s budgeted figure.

According to the budget documents, the government committed Rs 1,523 billion for the defense of the country, an amount higher than the Rs 1,370 billion last year, which was later revised to Rs 1,450 billion at the request of the Ministry of Defense. Defense.

Pakistan’s mighty military, which has ruled the coup-prone country for more than half of its nearly 75-year existence, has so far wielded considerable power in security and foreign policy.

Former Prime Minister Imran Khan, who was ousted in April in a vote of no confidence, had apparently lost support from the military after refusing to endorse the appointment of the head of the ISI spy agency last year .

This year’s defense allocation of Rs 1,523 is 11.16% higher than last year’s allocation of Rs 1,370 billion. Defense spending often comes under scrutiny at the time of the annual budget announcement when allocations for various sectors are assigned.

Defense spending accounts for 17.5% of total current spending, but it was listed as a single budget line as the government maintained a tradition of keeping defense spending details secret.

The budget showed that debt service increased to 29.1% of the budget, making it the largest expenditure and representing 45.4% of current expenditure.

Finance Minister Ismail announced that the government has set the target of 5% growth for the next fiscal year against the 5.9% achieved against 4.8% the initial target for the outgoing year.

The budget deficit was announced to be 8.6% of GDP, but the government has pledged to reduce it to 4.8% of GDP.

Inflation would be reduced to 11.5%, while the tax/GDP ratio would rise from 8.6% to 9.6%. The minister said that tax revenue was estimated at Rs 7,004 billion for the next fiscal year.

The import target is $70 billion while the export target is $35 billion. The government also hoped to receive more than $33.2 billion in remittances compared to $31 billion received this year.

The government has also announced that it will provide monthly support of Rs 2,000 to 80 million highly vulnerable people across the country. It also allocated Rs 51 billion for higher education in the country and Rs 24 billion for health.

Earlier, the special Cabinet meeting chaired by Prime Minister Shehbaz Sharif approved the budget. The Cabinet, among other last-minute measures, decided on a 15 percent increase in the salaries of government employees, while a 5 percent increase in pensions.

“The Prime Minister has rejected the Finance Ministry’s proposal for a 10% (salary) increase and has approved a 15% salary increase for government employees with Cabinet consent,” the Minister of Finance tweeted. ‘Information, Marriyum Aurangzeb.

The increase will impose an additional charge of Rs 71 billion on the government. The minister also highlighted the problem facing the country.

“The problem with our economy is that growth is 3-4%, but when it goes up to 5-6%, our current account deficit gets out of control, because we prioritize the elite, which increases our imports.

“We need to adopt a new way of thinking, to facilitate the low-income section to increase domestic production,” the minister said.

Also read: Government says Indian missile launch that landed in Pakistan was ‘accidental’; probe on

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