News
June 10 , 2022
Defense Budget Raised by 6% to Offset Inflation Impact
Islamabad: The government on Friday increased the defense budget for the outgoing fiscal year by nearly 6% to over Rs1.45 trillion in a bid to meet the needs of the armed forces, including their enhanced salary requirements.
The decision to increase the defense budget by another Rs80 billion was taken by the Economic Coordination Committee (ECC) of the Cabinet that in total approved Rs182 billion in supplementary grants.
The ECC also approved slapping a 10% regulatory duty on the import of petrol from China to curb the misuse of bilateral free trade agreement. Some oil marketing firms rerouted their imports through China to evade 10% customs duties.
The Ministry of Defense had demanded an additional Rs80 billion defense budget for “critical shortfalls” in addition to making adjustments in the budget for spending on the Jinnah Naval Base, the Naval Base Turbat and multi-functional office building in the headquarters.
Federal Minister for Finance Miftah Ismail presided over the ECC meeting that approved the Rs80 billion supplementary budget for the armed forces or to the extent of the actual additional expenditures being incurred. The finance ministry was of the view that the additional spending in fiscal year 2021-22 ending on June 30 will be less than Rs80 billion.
For the outgoing fiscal year, the National Assembly had last year approved a Rs1.373 trillion defense budget. With the raise in the spending ceiling, the next fiscal year’s defense budget may also now be higher than the earlier estimated figure of over Rs1.55 trillion.
In total, the Ministry of Defense got Rs153 billion or 11.8% additional money in this fiscal year over the revised budget of the previous year, which is equal to the average inflation rate in Pakistan. The defense spending will be equal to 2.2% of the Gross Domestic Product, excluding expenditures on the armed forces development program.
In July last year, the previous government had given 15% special allowance of the running basic pay to all ranks of the armed forces, which jacked up the army budget requirements by another Rs38 billion per annum.
However, ministry sources denied that there was an increase in the defense budget. "There is no increase in defense budget at all. The net effect is the same as the previous year.
"Inflation rate for this fiscal year is 11.3%. To cater for the inflationary impact, the Ministry of Defense received Rs153 billion as a supplementary grant. The rupee devaluation has also been absorbed and no additional grant has been requested. The total defense budget of the Army, Navy and Air Force is likely to be Rs1,453 billion, which is 2.2% of the GDP," they added… - The Express Tribune
Courtesy The Express Tribune