Defence budget up by 10 percent to Rs 545 billion

Defence budget

Pakistan on Friday increased its defence budget for the fiscal year 2012-13 by around 10 percent to Rs 545 billion.
The budget documents presented in the National Assembly by Finance Minister Dr Abdul Hafeez Sheikh said a sum of Rs 545 billion had been allocated for defence services, as compared to Rs 495 billion provided for the sector in the outgoing fiscal year.
The revised or actual expenditure on defence sector during fiscal year 2011-12 was Rs 510.179 billion, around Rs 15 billion more than the original allocation of Rs 495 billion.
The proposed allocation in fiscal 2012-13 for defence sector is equal to 18.4 percent of the federal budget of Rs 2,960 billion.
Traditionally, Pakistan has made allocations for its defence sector to maintain conventional parity with India, but for the last few years, the rise in budgetary spending for this sector is made also due to huge expenses made by the country on counterterrorism efforts, with Islamabad being an important state in the US-led global war on terrorism.
Owing to the financial crunch that is currently faced by the country, some quarters have been demanding cuts in the defence expenditure and the 10 percent increase is likely to be criticized by many in the coming days.
But military authorities say the rise in defence expenditure was nominal when compared with rising inflation.
According to a diplomatic source, the Pakistan-US ongoing row over NATO supply reopening and the holding back of Coalition Support Fund (CSF) for Islamabad by Washington is likely to impact the Pakistan’s defence budget and it is a matter of worry and concern for policy makers.
The United States has to pay around $1.1 billion to Pakistan against CSF and the country’s economic managers have already included the CSF reimbursements in the next budget.
Nonetheless, diplomatic circles also expect a settlement of Pakistan-US row in the coming few days and they believe that both states would be able to iron out their differences on conflicting matters soon.
“Talks are underway between Islamabad and Washington on the reopening of blocked NATO supplies and the release of CSF dues and they are being held on a positive note, hence some breakthrough in this regard is expected in the next few days. Hopefully any serious impact on the budget spending would be avoided,” said the source, seeking anonymity.

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