Finance Minister Miftah Ismail presented a Rs 9,502 billion annual budget to Parliament for the fiscal year 2022-23 on Friday announcing Pakistan would allocate Rs 1,523 billion for defense, an increase of over 11 per cent from last year.
The estimates showed that defence expenditures were the second largest part of the annual expenditures after debt payments.
Total current expenditures for the next year would be Rs 8,694 billion, a 15.5% increase over last year’s budgeted figure.
In its budget documents, the government commits Rs 1,523 billion to the defence of the country, up from Rs 1,370 billion last year, which was later revised to Rs 1,450 billion on the request of the ministry of defence.
Over the past 75 years, the Pakistan Army has held considerable power in matters of security and foreign policy as it has ruled the coup-prone country for more than half its existence.
After he refused to endorse the appointment of the ISI spy agency chief last year, Imran Khan, who was ousted from power by a no-trust vote in April, lost the support of the Army.
This year’s defence allocation of Rs 1,523 is 11.16 per cent higher than last year’s allocation of Rs 1,370 billion.
At the time of the annual budget announcement when allocations for various sectors are outlined, defence spending often comes under scrutiny.
Defence expenditures account for 17.5% of total current expenditures, but they appeared in the budget only as a one-line reference, since the government maintained the tradition of keeping details of defence expenditures under wraps.
Debt servicing now accounts for 29.1 percent of the budget, making it the single largest expenditure and accounting for 45.4% of current expenditures.
Finance Minister Ismail announced that the government set a growth target of 5 percent for the next fiscal year, against 5.9 percent achieved last year against the original target of 4.8 percent.
It was announced that the budget deficit was 8.6 per cent of the GDP but the government committed to reduce it to 4.8 per cent of GDP.
Inflation would be reduced to 11.5 per cent, while tax to GDP ratio would be increased from 8.6 per cent to 9.6 per cent.
The minister said that tax revenue has been estimated at Rs 7,004 billion for the next fiscal year.
Exports are targeted at USD 35 billion, while imports are targeted at USD 70 billion. In addition, the government anticipates receiving over USD 33.2 billion in remittances against USD 31 billion received in 2016.
Additionally, 80 million highly-vulnerable people across the country will receive monthly support of Rs 2,000. Additionally, Rs 51 billion was allocated to higher education and Rs 24 billion to health care.
Prime Minister Shehbaz Sharif chaired a special Cabinet meeting earlier in the day and approved the budget. As part of the last-minute measures, the Cabinet increased the salary of government employees by 15%, while pensions increased by 5%.
