ISLAMABAD:
The government on Tuesday approved a Rs50 billion supplementary budget for the armed forces to strengthen security at international borders, upgrade naval bases, and continue protecting foreign commercial interests in Pakistan.
Of the total, Rs39 billion has been allocated to the military and just under Rs11 billion to the navy, according to a decision by the Economic Coordination Committee (ECC) of the cabinet.
The ECC meeting, chaired by Finance Minister Muhammad Aurangzeb, considered proposals related to national security, defence, food security, and petroleum sector reforms, the Finance Ministry said.
“The ECC approved a summary from the Defence Division, granting a technical supplementary grant of Rs50 billion for various approved Defence Services projects,” the statement added.
These funds are allocated annually for projects outside the regular defence budget. Last fiscal year, the ECC had approved Rs45 billion for similar initiatives.
The ECC approved Rs19 billion for the Special Security Division South up 19% over a year ago. The special southern division is responsible for protecting the foreign commercial interests in southern regions.
Another Rs8 billion was given for the Special Security Division North that was responsible for protecting these in the northern parts. The amount was equal to last year’s allocation. The ECC approved Rs9.9 billion in lieu of its internal security duty allowance, which was also equal to last year’s spending.
An amount of Rs2 billion was approved for managing the fencing of the international borders with Afghanistan and Iran. The fences have been erected on the borders with Afghanistan and Iran to check smuggling and illegal movement of the foreign nationals.
The ECC approved Rs11 billion for the navy for up-gradation of two bases. Pakistan Air Force will get Rs150 million for the internal security duty allowance. For the current fiscal year the National Assembly had approved Rs2.556 trillion in defence budget for the regular expenses of the three armed forces.
In another summary submitted by the Interior Ministry, the ECC approved an additional Rs841.6 million as supplementary budget to support border control operations, internal security, and maintenance of law and order by the federal civil armed forces.
New public sector company
The Finance Ministry said that the ECC deliberated upon a summary presented by the National Food Security Ministry regarding winding up the Pakistan Agriculture Storage and Services Corporation (Passco) and the establishment of a new company.
The committee approved the formation of the Wheat Stocks Management Company (WSMC) with an authorised capital of Rs350 billion. A grade-20 officer of the National Food Security Ministry has been approved to be the first chief executive officer of the WSMC.
WSMC’s tasks include raising new loans from the commercial banks to retire liabilities of the Passco. The outstanding liabilities of the Passco are Rs528 billion but the government’s estimates suggested that over Rs400 billion liabilities would be settled against the receivables and by selling the wheat stocks.
The Finance Ministry will issue sovereign guarantees against the loans that the new company will obtain. The government will allocate money in the budget every year to pay off the principal and the interest on the loans to be taken for settling the Passco liabilities.
The government had abruptly closed Passco without first finding an alternative for settling the assets and liabilities of the storage corporation. It has now decided to hand over the business of wheat procurement to the designated private entities and to set up a new company to take care of the assets and liabilities.
The ECC also approved exemption for the new company from the applicability of the State-Owned Enterprises Act of 2023 on the grounds that the new public-sector firm would not be doing any kind of commercial activities and will only take care of the pending liabilities.
The ECC approved a supplementary budget of Rs100 million on the request of the Interior Ministry for the maintenance and repair of defence equipment utilised by the federal civil armed forces.
