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Business Recorder
20 minutes ago
- Business
- Business Recorder
Defence allocation raised to Rs2.557trn
ISLAMABAD: The federal government has increased the allocation for Defence Affairs and Services to Rs2,557.95 billion for the fiscal year 2025-26, showing a 20.2 percent rise from the original budget estimate of Rs2,128.78 billion for 2024-25 and a 16.8 percent increase from the revised estimate of Rs2,189.91 billion for the same year. This allocation represents 14.49 percent of the total budget outlay of Rs17.6573 trillion for FY2025–26, compared to 11.28 percent of the total budget outlay of Rs18.9 trillion in FY2024–25. The hike is attributed to ongoing inflationary pressures, sustained operational readiness requirements, and a recent escalation in border tensions with India, particularly skirmishes in the Sialkot and Neelum Valley sectors this year. These developments prompted renewed attention to military preparedness and deterrence across conventional and strategic levels. Pakistan budget 2025-26: Rs2.8 trillion defence budget proposed citing 'war-like situation' with India The allocation for defence services-a major component within the broader Defence Affairs and Services category-has been increased to Rs2,550 billion for FY2025-26. This marks a 20.2 percent rise over the original FY2024–25 budget of Rs2,122 billion and a 16.8 percent increase over the revised estimate of Rs2,181.5 billion. Within this amount, employee-related expenses have been raised to Rs846.03 billion from the Rs826.79 billion revised figure last year-an increase of approximately 2.3 percent. Operating expenses, which include fuel, rations, and training, have jumped to Rs704.4 billion, reflecting a 28.8 percent increase from the revised Rs547.01 billion. Physical assets (mainly arms and ammunition procurement) have been allocated Rs663.07 billion, up 20.5 percent from Rs550.19 billion last year. Civil works, covering construction and infrastructure maintenance, have seen a significant rise to Rs336.49 billion, up 30.6 percent from the revised allocation of Rs257.5 billion in FY2024–25. The budget for defence administration stands at Rs7.95 billion, a 5.5 percent decrease from the Rs8.42 billion revised estimate of the previous year. Meanwhile, the government has allocated Rs742 billion for pensions of retired military personnel, which is not included under Defence Affairs and Services. This is a 9.7 percent increase from the revised pension estimate of Rs676.08 billion for 2024–25 and a 12.1 percent rise from the original pension budget of Rs662 billion last year. Under the Public Sector Development Programme (PSDP), defence-related allocations have been reduced. The Defence Division has received Rs6.03 billion for 2025–26, compared to Rs6.78 billion in FY2024–25, reflecting a decrease of 11 percent. The Defence Production Division has been allocated Rs1.79 billion, down 52.5 percent from last year's Rs3.77 billion. The Strategic Plans Division (SPD), which oversees key elements of the country's nuclear and strategic capabilities, received Rs5.42 billion, representing a 77.5 percent cut from the Rs24.1 billion allocated last year. The Space and Upper Atmosphere Research Commission (SUPARCO) has also seen its development allocation drop from Rs24.1 billion to Rs5.42 billion. Similarly, the Pakistan Atomic Energy Commission (PAEC) saw its development allocation fall from Rs184.6 billion to Rs133.4 billion, a 27.7 percent reduction. These significant cuts suggest either budgetary tightening or reclassification of sensitive projects outside public documentation, defence analyst stated. Other defence-related heads across the budget include Rs274.15 billion allocated to the Combined Civil Armed Forces, up 12.8 percent from Rs243.1 billion last year. The Federal Government Educational Institutions in Cantonments and Garrisons have been granted Rs21.2 billion, while the Pakistan Maritime Security Agency (PMSA) received Rs1.27 billion. Despite a reduction in the overall budget outlay from Rs18.9 trillion to Rs17.6 trillion, defence spending continues to expand, reflecting the government's prioritization of national security amid regional volatility. With the inclusion of pensions and PSDP allocations, total visible defence-related spending now exceeds Rs2.9 trillion, affirming the sector's central role in Pakistan's fiscal and strategic planning, defence analysts maintain. Copyright Business Recorder, 2025
Express Tribune
07-02-2025
- Business
- Express Tribune
Proposal to set up transport division abandoned
Listen to article ISLAMABAD: The government has dropped the idea of setting up a transport division by merging different entities under its rightsizing programme. According to sources, the proposal was discussed in a recent high-level meeting, chaired by Prime Minister Shehbaz Sharif. The meeting was informed that the committee on rightsizing had discussed in detail the idea of creating a transport division by merging the Aviation, Railways and Communications Divisions. However, it was felt that such an arrangement could create complexity and disperse focus. It was also observed that the merger of the Aviation Division with the Defence Division offered a neater and more strategically synergistic option, especially since aviation was a subject of the Defence Division until 2013. Institutional arrangements evolve with the emerging requirements and any future institutional configuration will be shaped by the imperatives of the time. Accordingly, the committee on rightsizing agreed with the proposal of merging the Aviation Division with the Defence Division. The committee had received a reference on January 10, 2025, which proposed the merger of Aviation and Defence Divisions. With emphasis that it was a strategic initiative aimed at reducing the financial burden and enhancing the efficiency of the federal government, it was argued that the proposed merger would eliminate redundancies in administrative costs such as salaries, office maintenance and operational expenses. It will integrate aviation-related budgets into a broader framework, avoiding duplication of resources while promoting efficient financial management. The merger will remove the overlapping functions in policy formulation and regulatory oversight, yielding significant cost savings aligned with the federal government's goal of fiscal prudence. Additionally, the merger will bridge the gap between civil and military aviation and enhance synergy in airspace management and operational coordination. It will also enhance civil-military cooperation in overseeing functions like air traffic control, airport security and aviation safety. The restructuring of the aviation wing will focus on catering to the needs arising after the creation of Pakistan Civil Aviation Authority and Pakistan Airports Authority. The meeting was further informed that bureaucratic delays would be reduced to enable faster implementation of the aviation policy and directives, and greater compliance with the international standards set by the International Civil Aviation Organisation (ICAO) would be achieved to strengthen Pakistan's global standing in the aviation sector. It was highlighted that the merger was in line with the national security objectives and supporting disaster response, international negotiations and the development of comprehensive policy frameworks. A rationalised organogram was included with the reference along with details of expected savings of up to Rs145 million per annum as a result of the merger. It was proposed that the administrative, human resources and financial rearrangements entailed by the merger may be worked out by the Defence Division in consultation with the Establishment and Finance Divisions. Following approval of the proposal, the cabinet may also approve the issuance of a Statutory Regulatory Order (SRO), subject to vetting by the Law and Justice Division. Accordingly, the approval of the cabinet was solicited for the proposals. During discussion, the cabinet observed that pursuant to the proposed merger, the Defence Division may be renamed appropriately. The cabinet considered the summary titled "Recommendations of the Committee on Rightsizing of the Federal Government – Merger of Aviation Division with Defence Division," submitted by the Cabinet Division, and approved the proposal with the observation that the Defence Division may be renamed appropriately.
