Article Posted on : - Jun 13, 2013

ISLAMABAD (PTI): Pakistan's cash-strapped new government announced a hefty 15 per cent hike in its defence budget to Rs 627 billion, with the powerful army getting the lion's share of the outlay.

The government increased the allocation for defence in its budget for fiscal 2013-14 to Rs 627 billion (about USD 6.32 billion), marking an increase of little more than 15 per cent over the outlay for the current fiscal.

The allocation for the three defence services amounted to 15.73 per cent of the federal budget of Rs 3.985 trillion for fiscal 2013-14.

The army got the lion's share of the outlay with Rs 301.54 billion. The air force was allocated Rs 131.18 billion while the outlay for the navy was Rs 62.80 billion.

Further details, including allocations for weapons acquisition programmes, were not immediately available.

Official budget documents presented in parliament said a sum of Rs 627 billion had been allocated for the defence services for 2013-14, compared with Rs 545 billion (about 5.82 billion dollars) provided in the fiscal year ending on June 30.

The budget documents further showed that the new PML-N government had allocated Rs 2300 million for the Defence Production Division in the Public Sector Development Programme for 2013-14.

Of this amount, Rs 2246.300 million has been allocated for installing a ship lift, transfer system and associated machinery and equipment to provide docking and repair facilities for surface ships, submarines and commercial vessels at Karachi port.

Pakistan's new government led by Nawaz Sharif took office last week and faces big challenges like reducing budget deficit and crippling energy crisis.

The government also earmarked Rs 3545.457 million for the projects of the Defence Division in the Public Sector Development Programme for 2013-14.

According to the budget documents, Rs 3423.067 was allocated for ongoing schemes while Rs 122.390 was allocated for new schemes. Among ongoing schemes, Rs 2447.600 million was allocated for a complex of the National Electronics Complex of Pakistan in Islamabad while Rs 800 million was allocated for the new Gwadar International Airport.

The government also allocated Rs 52,300 million for ongoing and new projects of the Pakistan Atomic Energy Commission in the Public Sector Development Programme.

Out of this amount, Rs 26,138.00 million is the "foreign component" while Rs 26,162.000 million is in local currency, budget documents said.

Rs 45,352.40 million was earmarked for various ongoing projects of PAEC and Rs 76.163 million for upgrading the infrastructure of KINOPE in Karachi.

Rs 377 million were allocated for the MPB-2 Shanawa uranium mining project in Karak and Rs 300 million for MPS-3 Taussa-2 uranium mining project in Dera Ghazi Khan.

Finance minister Ishaq Dar told the national assembly that the government would clear $5 billion in circular debt from the energy sector within the next 60 days.

"This will greatly help minimise power cuts in the country," Dar said.

Pakistan has traditionally made defence allocations with the objective of maintaining conventional parity with India.

However, a crippling financial crunch has forced the government to balance military spending with expenditure on development and welfare programmes.