The declining share of defence in the overall federal budget reflects the transforming political economy and the direction in which things are moving. While the annual defence expenditure always exceeds the budgeted amount every year, the overall increase is now slower than the growth in public sector spending (PSDP) or transfer of resources to the provinces. The allocation for defence has been raised by 10 per cent this year to Rs275 billion that accounts for nearly 15 per cent of the Rs1,874 billion total budget outlay.

Reportedly, excluded from the budget is however soldiers pension funds amounting to some Rs38 billion, defence-related projects in the PSDP and the money received from the US for operations against militants. But the defence budget which, not long ago, was nearly equal to the development spending or exceeded it, is now just a little more than half of the Rs530 billion PSDP. If the allocations of the public sector corporations is included, the development spending shoots up to Rs724 billion.

While a much larger PSDP may be attributed to an election year, the last year’s development spending was about four times the figure budgeted in the first one or two years of President Musharaff’s government The trend in PSDP growth has been stabilised over the years. A huge PSDP in an election year also shows that democracy is a bread and butter issue for the common people.

While the nature of the political economy has undergone a critical change in the past two decades, the concept of the security state still prevails in parliamentary domain.. The defence budget is not subject to scrutiny by the Parliament which could perhaps better ensure that the best defence strategy is being followed or the best equipments are being purchased. Democratic accountability is also vital to determine whether conventional methods are adequate to meet threats to national security After all, the strategic defence can neither be insulated from economics or politics, or the people nor can it be the exclusive domain of the military experts, however, competent they may be. And to quote Alvin Toffler, of the three sources of power- knowledge, capital and muscle power, physical force is the most inferior

By excluding parliamentary debate and approval of defence budget, the limits of professionalism to deliver are not recognised. While experts and professionals can at best manage things, they cannot provide leadership to a nation’s people. And they try to escape democratic accountability.

Not long ago, there was a strong impression worldwide that a huge defence expenditure , says 25 to 30 per cent of the total budgetary outlay, provided the wherewithal for military’s intervention in politics. The situation appears to be changing now. Apart from the declining share of defence in the overall resources of the government, there is a now strong movement rooted in the civil society to make the executive accountable to the parliament and the judiciary. A major development towards consolidation of Constitutional rule is that for the first time assemblies will complete their tenure as mandated by the electorate. And the traditional power politics is now being weakened by the civil society’s struggle for the rule of law. The civic society is emerging as one of the centres of power , to have a strategic role in the national affairs for the long- term and on a durable basis..

The budget also is a clear indication of how resources are shared by different economic agents and the various tiers of the government. In an overall budget of Rs1874 billion, the provincial share, by way of fiscal transfers, would be a hefty Rs491 billion. Things are moving towards fiscal federalism that, in turn, is strengthening democratic federalism. Political parties of different schools of thought and representing diverse interests share power in coalitions governing the provinces. Though unconfirmed, there are press reports that the provinces may be given the status of the federating units sooner or later.

The budget has earmarked a large sum of Rs475 billion for debt servicing in 2007-2008. The total share of debt and defence amounts to Rs750 billion, or forty per cent of the total budget when decades ago the two consumed bulk of the annual budget allocation. By and large, there is some movement towards a self –reliant economic growth which can be accelerated by mobilising local funds, particularly at this point of time when the domestic market is awash with money. Economic sovereignty is vital to keep to shake off undesirable foreign influences.