Pakistan's defence expenditure in the next financial year will be around 7 per cent higher than it was in the outgoing year to Rs920.2 billion, the government announced in Friday's Budget 2017-18 speech.

The PML-N government's total budget outlay for 2017-18, possibly its last year in power, was Rs4.75tr, out of which 19.36pc has been kept aside under the Defence Affairs and Services head.

The operating expenses for the armed forces have been allocated Rs225.5bn, while almost Rs322bn will be sent on salaries and renumeration. The armed forces will get Rs244bn for 'physical assets' and Rs128.35bn for 'civil works'.

The government will separately pay nearly Rs180bn in pensions to retired military officials and jawans. This does not count in the budget allocated to defence services.

Finance Minister Ishaq Dar, who presented the budget in Parliament, also announced a 10pc increase in the pay of all armed forced personnel as a 'special allowance' in recognition for their sacrifices in the ongoing conflicts across the country.

"I announce today that a 10pc will be given on the pay of all officers and jawans as special allowance. This allowance will be in addition to the increase in pay that will be announced," Dar said as he presented the Federal Budget 2017-18.

The Frontier Constabulary's jawans will also be given a fixed allowance of Rs8,000 per month, the government said. The special allowance and the fixed allowance are both separate from the defence budget.

The 'special allowance' was also topped up with a 10pc ad hoc increase in salaries for army personnel, along with other government employees.

Dar additionally said during his budget speech said the National Security Committee had recommended that 3pc of the provinces' Gross Divisible Pool should also be allocated to defence expenditures; however, the provinces have yet to get on board with this proposal.

"Large operations like Zarb-i-Azb require vast sums. This is our national duty against terrorism for which provision of resources is the responsibility of the entire nation," Dar urged during his Friday budget speech.

The government will also be launching a new scheme through the Central Directorate of National Savings (CDNS) for the welfare of families of martyrs.

Under this scheme, a guaranteed and enhanced profit will be given as a means of support for martyrs' families.