Defence budget increased by 16%

[Naveed Yaseen]

By Sajjad Malik
ISLAMABAD: The government, according to the federal budget announced on Saturday, has allocated Rs 343 billion for the defence sector in the fiscal year 2009-10 – an increase of 15.81 percent.

The defence sector’s allocation for the current fiscal year was Rs 296 billion.

Of the total allocated amount, Rs 341.62 billion have been allocated for military defence and Rs 1.289 billion for defence administration. Of the military defence allocation, Rs 115 billion will be spent on salaries and allowances. Operating expenses will amount Rs 922 billion and the cost of physical assets will be Rs 107.377 billion. The army will spend Rs 27.49 billion on civil works.

The increase is virtually negligible, considering the country’s double-digit inflation and the mounting cost of the war against terrorism. A 15 percent increase in the salaries of military personnel will also reduce the impact of the increase in the defence budget.

The ongoing war on terror has been taking its economic toll and Pakistan has suffered massive losses both in terms of stagnation in economic growth and increases in defence spending to fight the Taliban.

“The war on terror has already cost us over $35 billion since 2001-02 in economic costs. We now face the prospect of incurring huge costs on account of counter-insurgency expenditures,” Minister of State for Finance Hina Rabbani Khar said in her budget speech.

She said Pakistan had to meet the maintenance and rehabilitation costs of almost 2.5 million people displaced by the war. “Rs 50 billion [has been allocated] in the 2009-10 budget for the relief, rehabilitation … and security of the internally displaced persons,” she said.

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