The Government of Pakistan has presented the budget for the financial year beginning July 1, 2018. However, this move is being criticized by the opposition parties. These parties believe that the government should present provisional budget for a short period of time and whatever party that came to power after the general election, should submit the budget for the fiscal year. There are many things to consider in this budget the most important among these is its fast growing defense budget which has attracted the attention of defense and strategic analysts.
The defence ministry of Pakistan has insisted that increase in the defence budget for the next financial year was necessitated by the challenging security environment. The defence spending is proposed to increase to Rs 1.1 trillion (approximately $9.6 billion) in 2018-19.
The proposed allocation of Rs1.1trillion is being compared with the original allocation of Rs920billion for the outgoing year, which has been computed as a 19.6 per cent hike — the highest in decades. Rs. 100 billion that has been allocated for the Armed Forces Development Programme (AFDP), then the defence budget, on the whole, would actually rise to 30%. The figures also do not include Rs 260 billion allocated for the pensions of military personnel, which will be given from the civilian budget.
Allocation of funds
According to a statement from Ministry of Finance, Pakistan, In the existing budget, the Pakistan army will get 47 per cent of the share, Pakistan Air Force will get 20 percent and 10 per cent would go to Pakistan Navy. Out of the Rs. 1,100 billion, Rs. 423 billion would be for employee-related expenditure, Rs. 282 billion for procurement of arms and ammunition, Rs. 253 billion for operating expenses and Rs. 141 billion for civil works. Rs. 180 billion is being seen as Pakistan’s effort to modernise its existing system to fight terrorism on its soil and also counter India in the region. The budget allocated excludes Rs. 260 billion that has been allocated for the expenditure related to pensions of defence personnel (which is 76pc of the federal government’s total pension bill) as well as Rs45bn for security enhancement.
Increase: how much?
According to Pakistan’s Ministry of defence “Defence budget for the year 18-19 stands at Rs1.1 trillion which is 10.2pc increase to the closing year. The routine yearly increase ranges between 10pc and 12pc which caters for inflation, depreciation, rise in pay etc”.
“This year increase in defence budget is also considered a normal increase, keeping in view all internal and external challenges posed to Pakistan,” it added.
Statement by Ministry of defence states further that “journalists usually measure the defence allocations in terms of the percentage increase over previous year. This does not give a correct view. Therefore, defence budgets for a more realistic analysis are measured in terms of percentage of both overall public spending and of Gross Domestic Product (GDP).”
Over the past decade or so defence spending was reduced to less than 3pc (around 2.6pc) of GDP and similarly its share in the national pie was also reduced to well under 20pc. It is now once again set to reach 3.2pc of GDP and 21pc of the total outlay for the next year.
What it means for India?
This Defence budget indicates that Pakistan is attempting to maintain a basic operational capability along the borders with India and the Line of Control.
This increase could also be used to sponsor terrorist and fundamentalist organisations and to back terrorist attacks in Jammu and Kashmir as well as other parts of India. Another important reason could be dwindling US security aid. In January, the US president Donald Trump allege Pakistan for harboring terrorist organisations and had suspended about $1.1-billion security assistance to Pakistan until Islamabad took action against the terrorist groups operating out of its territory.
In 2013-14, the total outlay of defence budget was around Rs600 billion which has now jumped up to Rs1.1 trillion, showing an increase of 83 per cent in the last 5 years.
It is a proven fact that indiscriminate and inconsiderate spending on defense sector by Pakistan has been a cause of concern for India.
However, in comparison to India’s defence budget (Rs 2.95 lakh crore or $45 billion), it is five times lower. On the contrary of Pakistan’s sharp increase in defence budget, Indian Finance Minister Arun Jaitley had allocated Rs. 3,59, 894 crores ($45 billion)for 2018-19 fiscal year. In India, the budget allocation for defence has been the lowest since last ten years, amounting to only 2.3 per cent of India’s GDP.
The aim of this budget is to prove government’s concern for strengthen the Pakistan's security and integrity in the minds of the people; on the other hand it is the instrument to overcome the differences with the Pakistan army, to create harmony with it. It is notable that in many influential circles of Pakistan, it is believed that after court’s verdict, Nawaz Sharif's resignation as Prime Minister and after that supreme court’s another verdict which disqualified him forever for holding any public office, however was a judiciary's verdict, but the army has played an significant role. So, now the Pakistan Muslim League understands it very well that if he has to come to power again, it will have to leave the way of encounter with the army. In Pakistan, democracy has never been so strong that it can bear cost of confrontation with the army; therefore, its appeasement through providing resources is a better solution in Pakistan.