Islamabad: Pakistan announced a nearly 15 per cent hike in its defence spending and allocated Rs 2,122 billion in the 2024-25 budget, marking a significant increase from last year amid strenuous efforts to secure a fresh loan from the IMF to meet the cash-strapped nation's external liabilities.
Finance Minister Muhammad Aurangzeb presented the budget in the National Assembly, the first budget of the Pakistan Muslim League (Nawaz) (PML-N) and Pakistan Peoples Party (PPP) coalition government which came to power after the February 8 general elections.
Last year, the government allocated Rs 1,804 billion for defence, which was higher than the Rs 1,523 billion allocated the previous year.
Aurangzeb said the government set a 3.6 per cent GDP growth target for the next year - higher than the 3.5 per cent set for the outgoing year. The country, however, missed that target and could only achieve 2.38 per cent growth. He said the total volume of the budget would be Rs 18,877 billion and announced a Rs 2,122 billion allocation for defence spending, reflecting a 14.98 per cent increase.
Over Rs 1,804 billion was budgeted for the fiscal year 2023-24, ending on June 30. The defence sector expenses are the second biggest component of the annual expenditure after the debt payments, which for the next year would be Rs 9,700 billion and constitute the single biggest expense of the debt-trapped country, which is dependent on loans from friendly nations like China.
He said the inflation target for the next fiscal year would be 12 per cent while the budget deficit would be 6.9 per cent of the GDP. The minister said the tax collection target would be Rs 12,970 billion - 38 per cent higher than the previous year.
He said the non-tax revenue target of the government would be Rs 3,587 billion against Rs 2,963 billion set for the previous year. The government also decided to provide a historic Rs 1,500 billion Public Sector Development Programme (PSDP) at the federal level and by adding the provincial component of the development budget, the net PSDP comes to a whopping Rs 3,797 billion.
The minister said the economic crisis had ended and the government fast-tracked the development process by offering new opportunities. He also announced plans to speed up the privatisation of loss-making state-owned entities as well as outsource various airports.
