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ISLAMABAD: Allocation for defence for Fiscal Year 2021-22 has been raised by 6.2 percent, from Rs1.292 trillion in the original estimates of 2019-20 to Rs1.373 trillion for 2021-22.

The defence budget is 16.19 percent of the total budgetary outlay and 2.87 percent of next year's projected GDP of 47.7 trillion rupees. The nominal GDP for FY 2021 is projected to increase from Rs45,567 billion to Rs47,709 billion.

The original allocation for last year was Rs1.292 trillion, but according to revised figures Rs1.299 trillion had been spent. The military voluntarily opted for a wage freeze in FY 2019-20 because of the economic challenges facing the country. Subsequent to the closure of the Coalition Support Fund after 2018, defence and security needs were met from domestic resources.

The defence budget does not include pensions, estimated to rise by 10 percent next year - to Rs360 billion under current expenditure - while other major defence related procurements and strategic programmes are not made public. The amount budgeted for defence administration is Rs3.275 billion. However, the rest of the allocation is for defence services which include employee-related expenses (Rs481 billion) including salaries and allowances paid to troops in uniform and civilian employees and operating expenses have been budgeted at Rs327 billion that include transport, POL (petroleum, oil and lubricants), rations, medical treatment, training etc.

Around Rs391 billion has been proposed for physical assets utilised for local purchases and import of arms and ammunition and related procurements. Civil works that include funds marked for maintenance of existing infrastructure and construction of new buildings have been budgeted at Rs169 billion. Apart from this, Rs1.978 billion has been allocated under the head of PSDP to the defence division and Rs1.745 billion to the defence production division.

The defence budget of the Pakistan Army is seven percent of the national budget.

Copyright Business Recorder, 2021

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