As tensions escalate with India, Pakistan decides to increase defence spending by 18 per cent in budget: Report

Pakistan missile military army.

In a clear bid to shore up its finances for defence expenditure in the backdrop of the ongoing tensions with India, the coalition government in Pakistan has endorsed an 18 per cent increase in defence spending to over Rs 2.5 trillion in the next budget, reported news agency PTI attributing it to the The Express Tribune.

The Express Tribune reported that the Pakistan Peoples Party (PPP) delegation, led by its chief Bilawal Bhutto Zardari, met with Prime Minister Shehbaz Sharif and his economic team to discuss the budget matters on Monday. The government is set to unveil the 2025-26 budget in the first week of the next month ahead of the start of the new fiscal year from July 1.

The defence sector expenses are the second biggest component of the annual expenditure after the debt payments. In the current year, Rs 9,700 billion allocated for debt servicing constitutes the single biggest expense of the country.

The Pakistan Muslim League-Nawaz (PML-N)-led government shared roughly Rs 17.5 trillion worth of new budget framework with its key ally, the PPP, which agreed to 18 per cent increase in the defence outlay.

There was a consensus between the PML-N and the PPP to increase the defence budget due to the recent wave of tensions with India, the newspaper said, quoting sources.
They said that the PPP backed the proposal to increase the defence budget by 18 per cent to over Rs 2.5 trillion in the light of the prevailing security threats.

In the current fiscal 2024-25, the government allocated Rs 2,122 billion for defence spending, reflecting a 14.98 per cent increase over Rs 1,804 billion budgeted for the outgoing fiscal year 2023-24.

“The size of the budget is lower than Rs 18 trillion, which is less than this year's budget due to steep reduction in the interest expense on the back of an 11 per cent cut in policy rate by the central bank,” the publication added.

India on April 23 announced a raft of punitive measures against Pakistan, including suspension of the Indus Waters Treaty, shutting down of the only operational land border crossing at Attari and downgrading of diplomatic ties in view of cross-border links to the Pahalgam attack that killed at 26 tourists and injured many more.

(With PTI inputs)