ISLAMABAD: The government has increased defence spending for the next financial year by 11.6 per cent to Rs781 billion.

Presenting the budget in the National Assembly, Finance Minister Ishaq Dar said: “The defence budget is being increased from Rs700bn for the outgoing fiscal year to Rs 780bn for 2015-16.”

The budget documents laid in the National Assembly put the defence budget figure at Rs781bn.

The minister said that while the overall current expenditure of the government had declined nominally by 0.7pc, the defence expenditure was being increased in view of the security situation and requirements of the armed forces.

Also read: Ishaq Dar eyes 7pc growth by tenure end

The 11.6pc hike in defence spending contrasted with a mere 4.8pc increase in the total outlay of the budget as compared to the outgoing year.

The planned military expenditure is growing both in terms of share of the overall national budget and the GDP. It would make 19pc of the total size of the budget as compared to 18pc in the outgoing year. The proposed spending would account for 2.54pc of the GDP, while its share earlier was 2.3pc.

Measuring the defence budget as percentage of the GDP indicates the burden put on the economy by the allocation, while a comparison with the national budget shows how much money is going to the armed forces in real terms.

The increase in military spending has been proposed against the backdrop of renewed tensions with India, which is the largest military spender in the region with a defence budget of $40bn and has become one of the world’s biggest arms importers in its quest to build up its military might; and the continuing operations against militants in different parts of the country.

Globally the military spendings after declining for three consecutive years have levelled off because of increases in Asia, the Middle East, Eastern Europe and Africa, according to Stockholm International Peace Research Institute, which keeps a track of the military expenditure around the world.

Services share

While the army as always would get the lion’s share – 48pc out of the defence budget pie, it was Navy that saw its share grow by 19pc ostensibly because of plans for buying submarines and helicopters from China.

The share of various services in the defence budget is army (Rs371bn), air force (Rs164.24bn), navy (Rs85bn) and the Defence Establishment comprising inter-services organisations, including ISI (Rs160.7bn).

Head-wise expenditure

Of the Rs781bn earmarked for the armed forces, Rs326bn would be spent on expenses related to employees that include pay and allowances of uniformed troops and civilian employees paid out of the defence budget.

Operating expenditures of the armed forces on transport, POL, ration, medical treatment and training are expected to consume another Rs200bn. Civil works that account for maintenance of infrastructure and construction of new buildings would get Rs87bn.

Another Rs169.6bn would be provided for physical assets, including procurement and maintenance of arms and ammunition.

Teeth to tail ratio of defence allocation that averaged 20:80 in the past has improved to 22:78. The ratio helps compare the amount spent on arms and ammunition (teeth) to the costs incurred on logistics and maintenance of troops (tail).

Published in Dawn June 6th, 2015

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