Pakistan's Defence Budget Set for Significant Increase Amid Rising Tensions with India
Defence Spending Surge in Pakistan
Islamabad: The coalition government of Pakistan has approved an 18% rise in its defence budget, bringing it to over Rs 2.5 trillion for the upcoming fiscal year, as reported on Tuesday. This decision comes in light of escalating tensions with India.
The new budget for 2025-26 is expected to be presented in the first week of next month, just before the new fiscal year begins on July 1.
Tensions between India and Pakistan have intensified following a terrorist attack in Pahalgam, Jammu and Kashmir, on April 22, which resulted in the deaths of 26 individuals.
According to The Express Tribune, a delegation from the Pakistan Peoples Party (PPP), led by Bilawal Bhutto Zardari, met with Prime Minister Shehbaz Sharif and his economic advisors on Monday to discuss budgetary issues.
The ruling Pakistan Muslim League-Nawaz (PML-N) government shared a new budget framework worth approximately Rs 17.5 trillion with its coalition partner, the PPP, which consented to the proposed 18% increase in defence spending.
Sources indicate that both the PML-N and PPP reached an agreement to boost the defence budget in response to the recent surge in tensions with India.
The PPP supported the increase to over Rs 2.5 trillion, citing ongoing security threats as justification.
For the current fiscal year 2024-25, the government allocated Rs 2,122 billion for defence, marking a 14.98% increase from the Rs 1,804 billion budgeted for the previous fiscal year.
Defence expenditures rank as the second-largest portion of the annual budget, following debt servicing costs. This year, Rs 9,700 billion has been allocated for debt payments, making it the largest single expense in the country.
The budget's overall size is projected to be below Rs 18 trillion, a reduction from the previous year, attributed to a significant decrease in interest expenses following an 11% cut in the central bank's policy rate.
On April 23, India announced several punitive actions against Pakistan, including the suspension of the Indus Waters Treaty, closure of the only operational land border crossing at Attari, and a downgrade in diplomatic relations due to cross-border connections to the attack.
In retaliation, Pakistan closed its airspace to Indian airlines and halted all trade with India, including through third-party countries.
Additionally, Pakistan successfully conducted a training launch of the 'Fatah series' surface-to-surface missile, which has a range of 120 kilometers, and previously launched the Abdali Weapon System, a surface-to-surface missile with a range of 450 kilometers.