Pak increases defence budget to Rs 250 bnAdd to Clippings
[ Monday, June 05, 2006 10:11:55 pmPTI ]
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ISLAMABAD: Aiming to acquire high-tech equipment, Pakistan on Monday increased its defence budget from Rs 223.5 billion to Rs 250 billion even as the country’s military spending last year shot up by nearly Rs 18 billion rupees.
Unveiling the budget for the financial year 2006-7 in the National Assembly, Minister of State for Finance Umer Ayub Khan said the defence expenditure constituted three per cent of the total GDP, which amounted to Rs 1350 billion rupees.
Pakistan had increased its defence budget by 15 per cent last year, which was found to be inadequate. The budget survey released on Sunday had said that the allocation of 223.5 billion rupees for 2005-6 was not sufficient and the total defence spending for the current financial year went to over Rs 241.1 billion, an increase of Rs 17.6 billion.
Ayub’s budget presentation was, however, marred by a boycott by all the opposition parties. Opposition lawmakers walked out of the House as he rose for the budget speech, alleging that the government failed to bring down prices of essential commodities.
They said the poor economic performance was disappointing and depressing. Pakistan Defence budget since 2001 excludes defence pensions, which was officially acknowledged by the defence officials.
The defence pensions, which were shown as part of civil pensions, amounted to over Rs 45 billion. The increase in defence spending came up after Pakistan cabinet approved the purchase of air-borne radar systems called ‘AWACS’ from Sweden worth one billion dollars to counter Falcon airborne radars being acquired by Indian Air Force.
Pakistan has also approved purchase of 25 F-16 fighter jets from US and unspecified number of J-10 jet fighters being developed by China.
Pakistan Navy has struck a 600 million dollars deal with China to acquire four naval frigates and a similar agreement with Greece to get four more naval frigates.
These are in addition to a variety of missile systems being acquired, including the large stock of Harpoon missiles. In the present budget, defence got Rs 250 billion while Education was allotted Rs 187 billon followed by health (Rs 472 billion) and Housing and Works (Rs 104 billion).
Ayub said Rs 64 billion has been allocated for relief and reconstruction of the earthquake-hit areas. But completely rejecting the budget as “anti-people”, Pakistan People’s Party (PPP), headed by former Premier Benazir Bhutto, said that for the first time, the defence expenditure has exceeded developmental expenditure.
The worrying proposition from people’s point of view was that the defence expenditure has surpassed the development expenditure for the first time, PPP spokesman Farhtullah Babar said.
While this year’s defence expenditure grew from Rs 223 billion to Rs 241 billion, the public sector development projects allocations has come down from Rs 228 billion to Rs 272 billion, which pointed out that the defence spending has overtaken development projects of people, he said.
The Economic Survey said the economy grew at the rate of 6.6 per cent, falling short of the seven per cent target. As per the survey, the services sector registered 8.4 per cent.
But Pakistan’s industrial and agricultural outputs fell far short of expectations, according to the economic survey.
The agriculture sector, with about 23 per cent share in the GDP, grew by a nominal 2.5 per cent against a target of 4.8 per cent for the current year and against 6.7 per cent farm growth achieved last year.
Major crops registered a decline of 3.6 per cent as production of two of the four major crops, cotton and sugarcane was significantly lower than past year.
The industrial sector too registered a poor growth rate of 8.6 per cent against last year’s 12.6 per cent.
The survey said foreign direct investment increased by over 238 per cent, attracting 3.1 billion dollars against 891.5 million dollars during the same period last year while the country’s foreign exchange reserves swelled to over 13 billion dollars or equivalent to over six-month coverage of imports.
Significantly, Pakistan’s external debt, which was brought to down in the aftermath of the 9/11 attacks in 2001 with various countries including United States writing off large amount of loans and rescheduling some with negligible interest rate, rose again to 36.557 billion.
But at the same time the survey has claimed that poverty has declined from 34 per cent to 23.9 per cent.
The percentage of population living below the poverty line in rural areas has declined from 39.26 to 28.10 per cent while those in urban areas, it has declined from 22.69 to 14.9 per cent in this period, Dr. Salman Shah, Economic Advisor to the Prime Minister told reporters while releasing the survey.
Opposition parties however termed the budget and the survey as fudging of figures and pointed to government’s failure to bring down hike in prices of essential commodities like sugar, rice, meat and vegetables.
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