Defence outlay to be raised to Rs 442 billion

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Defence outlay to be raised to Rs 442 billion

ISLAMABAD (May 31 2010): Outlay on defence would be raised by Rs 100 billion, or about 23 percent, from Rs 343 billion allocated during 2009-10, to Rs 442 billion in the upcoming budget for 2010-11, sources told Business Recorder. However, in comparison with the original budgetary allocation for 2009-10 of Rs 378 billion the actual increase on defence would be 14.5 percent.

On Saturday, Prime Minister Yousaf Raza Gilani had also hinted that defence budget would be raised but had added that the actual amount would be disclosed at the time when the federal budget is presented before parliament on June 5, after he returns from the visit to Spain and Belgium. Sources said that the government would meet the budgetary requirements of defence sector as war on terror is the top priority of all state organs.

According to sources, the government doubled the pay of all military personnel deployed on the western borders from July 1, 2009; and doubled the salary of all other military personnel from 1 January 2010. This, it was argued, would boost the morale of the troops to better tackle the challenge of security operations. The net impact of the rise in salaries of military personnel is estimated at Rs 70 billion.

Sources said that expenditure of defence sector, other than remuneration allowances, would also witness an increase. This is largely due to inflationary/exchange rate pressures for procuring supplies.

An additional Rs 29 billion (amounting to 9 percent of increase when compared with budget 2009/10) is added related to operating expenditure (inventory and fixed assets procurement). On Saturday, Prime Minister Gilani had also clarified that the salaries of the armed forces had already been increased after formal approval of the federal cabinet.

Surprisingly, Advisor to Prime Minister on Finance, Dr Abdul Hafeez Sheikh, reportedly apprised the National Assembly standing committee on finance a couple of weeks ago that the outlay on defence would be increased by Rs 105 billion in the upcoming budget. However, there has been no official statement on the exact amount of the defence budget so far.

Business Recorder [Pakistan's First Financial Daily]

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Pakistan to increase defence spending

Saturday, 5 June 2010

Pakistani troops in Peshawar (file image) Pakistani troops have faced stiff resistance in the restive north-west

Pakistan has announced it is to increase defence spending by 17% in the coming year, with analysts saying much of it will be used to combat militants.

In his budget speech to parliament, Finance Minister Abdul Hafeez Shaikh said security forces should know they had the support of MPs.

Defence spending will rise to more than $5bn a year from next month.

Pakistani forces have carried out major offensives in the north-west over the past year.

However, there has also been a wave of deadly attacks by Islamic militants throughout the country.

"I think security is our topmost issue," said Mr Shaikh.

"We are facing a situation in which our armed forces, paramilitary forces and security forces are laying down their lives. They are bearing pain for the country and the people, I salute them. They should know from this house that we all stand by them."
Suicide attacks

In the past three years more than 3,400 people have been killed across Pakistan in bomb blasts and suicide attacks blamed on Taliban militants.

Last week more than 90 people were killed in co-ordinated attacks on two mosques of the minority Ahmadi Islamic sect in Lahore.

Pakistan, a vital ally for the US, has been heavily burdened by the cost of fighting Taliban insurgents along its Afghan border.

Mr Shaikh said government policies had reined in inflation - from 25% down to 13% - and brought economic stability.

"We are seeing the beginning of recovery," he said.

In 2008 Pakistan secured a $10bn loan package from the International Monetary Fund to keep its economy on track.

Analysts say the IMF is now putting pressure on Pakistan's financial institutions to make further reforms.

BBC News - Pakistan to increase defence spending