Pakistan today announced an increase of almost Rs 15 billion in its defence budget, much against the wishes of its aid donors, saying its spending cannot be curtailed in the face of military tensions with India. Presenting the budget for the fiscal year July 2002-03 over the radio and TV, Pakistan’s Finance Minister Shoukat Aziz said the defence budget has been increased to Rs 146 billion as against last year’s original estimates of Rs 131.6 billion. He said defence allocation could not be curtailed in the name of any economy drive. ‘‘Defence is the ultimate need of any sovereign nation,’’ he said. ‘‘Due to tensions on our western borders we cannot limit our defence needs,’’ Aziz said. He also said that his government has fixed a growth rate of gross domestic product (GDP) at 4.5 per cent against 3.6 per cent this year. He said the inflation rate would also be brought down to 3.9 per cent from around 5 per cent. The new budget put the overall spending at Rs 742 billion for 2002-03 which was 1.3 per cent less than budget estimates for 2001-02 and 4.1 per cent higher than the revised estimates for 2001-02. Pakistan’s defence allocation for the outgoing 2001-02 was increased to Rs 151.7 billion few months ago in the face of worsening political and military ties with India. Pakistan’s budget deficit was expected to decline to 4.0 per cent of GDP against seven per cent of GDP in the revised 2001-2002 budget. He said Pakistan’s economy continued to show signs of stability with its foreign debts, after recent reductions from various countries, estimated to be around $36 billion, which was a billion dollar less than last year. Earlier, the budget was approved by a Cabinet meeting presided over by Pakistan President Pervez Musharraf. Pakistan’s foreign exchange reserves went up by over $6 billion while its domestic debt declined by 8.2 per cent. The economic recovery was attributed to reforms as well as a larger inflow of foreign aid in response to Pakistan joining the international community in the fight against terrorism after the September 11 terrorist attacks in the US. (PTI)
