Last year, the Pakistani government allocated Rs1,804 billion for defence spending, higher than the previous year’s Rs1,523 billion.
 "Pakistan government announces defence budget increase of around 15% for 2024-25")
Press Trust of India Islamabad
Pakistan on Wednesday announced an increase of about 15 percent in defense spending, allocating Rs2.122 trillion in the 2024-25 budget, a significant increase from last year as it struggles to secure fresh loans from the IMF to repay the country’s cash-strapped foreign debt.
Finance Minister Muhammad Aurangzeb presented the first budget in the National Assembly (lower house) of the coalition government of the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan People’s Party (PPP), which came to power after the February 8 general elections.
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Last year, the government allocated Rs1,804 billion for defence, higher than the previous year’s Rs1,523 billion.
Aurangzeb said the government has set a GDP growth target of 3.6 percent for next year, higher than last year’s 3.5 percent, but the country has missed the target, clocking a growth rate of just 2.38 percent.
The minister announced that the total budget will be Rs18,877 billion, with defense spending earmarked for Rs2,122 billion, an increase of 14.98 percent.
More than 1,804 billion rupees has been budgeted for the 2023-24 fiscal year, which ends June 30. Defence spending is the second-largest component of annual expenditure after debt servicing, which will total 9.7 trillion rupees next year, the largest expenditure for a debt-ridden country that relies on loans from friendly countries such as China.
He said the inflation target for next fiscal year would be 12 percent and the fiscal deficit would be 6.9 percent of GDP.
The minister said the tax revenue target will be Rs12.97 trillion, up 38 percent from the previous year.
He said the government’s non-tax revenue target will be Rs3,587 billion as against Rs2,963 billion last year.
The government has also decided to provide a historic Rs1.5 trillion Public Sector Development Programme (PSDP) at the federal level and with the addition of the provincial portion of the development budget, the net PSDP will reach a whopping Rs3.797 trillion.
He said the economic crisis had ended and the government had accelerated the development process by providing new opportunities. He also announced plans to speed up the privatization of loss-making state-owned enterprises and outsource various airports.
