ISLAMABAD: The government announced on Tuesday an 11 per cent increase in defence spending for the next fiscal.

According to the budget documents placed before parliament, the government has allocated Rs700 billion to the armed forces for the fiscal year 2014-15 against the revised amount of Rs629.5bn for the outgoing year.

The allocation is about 18 per cent of the national budget and 2.36 per cent of the GDP.

The 11 per cent increase in defence spending appears to be significant when compared to a mere two per cent increase in the total budgetary outlay for the next year over the outgoing year.

Of Rs700bn set aside for the armed forces, Rs239.6bn to be spent on salary, allowances

“Budgetary needs of our armed forces as per their requirements have been duly provided for in the budget,” Finance Minister Ishaq Dar said in his budget speech in the National Assembly.

The increase has come against the backdrop of what he described as “restored health of the economy”.

This year the country has registered an economic growth rate of 4.14 per cent which is the highest in the last six years when it averaged about three per cent. Moreover, inflation has declined to 8.6 per cent and foreign exchange reserves have increased.

Of the Rs700bn earmarked for the armed forces, Rs239.6bn will be spent on employee-related expenses, including the salary and allowances of uniformed personnel and civilian staff.

Operational expenditure of the armed forces, on transportation, rations, medical treatment and training, are expected to consume Rs180.2bn. Civil works that account for maintenance of existing infrastructure and construction of new buildings will get Rs73.3bn.

An amount of Rs152.8bn has been provided for physical assets — the accounts head from which allocation for procurement and maintenance of arms and ammunition is made.

The tooth-to-tail ratio of the defence allocation, which has normally stood at around 20:80, has slightly improved to 22:78. The ratio helps compare the amount earmarked for arms and ammunition (tooth) to the allocation for logistics and maintenance of troops (tail).

As usual, the army has received the bigger slice by getting Rs331.4bn. The Pakistan Air Force (PAF); and Inter-Services Organizations and Defense Production Establishment roughly got equal share with Rs 149.7 billion and 147 billion respectively.

Inter-Services Intelligence (ISI) is also paid out of the allocation (Rs 147 billion) for Inter-Services Organizations'.

The navy has got the lowest share among the services with an allocation of Rs71.4bn.

Published in Dawn, June 4th, 2014