ISLAMABAD, June 19: The Senate on Saturday rejected Opposition's demand for a cut in defence budget but adopted a resolution asking the National Assembly to withdraw proposed collection of TV licence fee with electricity bills.

The resolution for the defence budget reduction was moved by Opposition leaders Senator Farhatullah Khan Babar, Dr Akbar Khwaja of Pakistan People's Party Parliamentarians and Sanaullah Baloch of the Balochistan National Party (BNP).

Moving the resolution on behalf of the Opposition, Mr Babar said the defence budget should be reduced and brought down to Rs163.7 billion from the proposed allocation of Rs193 billion.

Mr Babar said there was a difference between the defence budget and expenses of the military personnel.

He said even the finance minister did not know the break-up of the defence budget.

"Can the finance minister tell the house as to how much of this Rs193 billion money will be spent on salaries of military officials and on other expenses?," he asked.

Similarly, Mr Babar said, the finance minister was not aware as to what was the share of the army, air force and navy in this allocation. He said actually the defence budget had been increased to Rs250 billion as pensions of retired military personnel and other sensitive institutions which come around 47 billion rupees had been included under the civilian head.

Moreover, he said, the allocation for several law-enforcement agencies like Rangers had been made from the civilian pool.

Mr Babar also expressed his concern that the amount collected through commercial plazas built on defence lands did not go to the Federal Consolidated Fund.

"The nation is even ready to pay Rs250 billion for the defence provided the finance minister presents a break-up of the defence budget in the standing committee on defence," the PPP leader said.

Dr Akbar Khawaja of the PPP said the minister was wrong to say that just seven per cent increase had been made in the defence budget.

He said the actual increase was 20 per cent as the budget had been increased to Rs193 billion from the last year's allocation of Rs160 billion - an increase of Rs33 billion. "It's a simple mathematics," he said.

He called for reversal of this increase and proposed that this amount should be spent on poverty alleviation. BNP Senator Sanaullah Baloch said heavy weapons, guns and nuclear capability could not guarantee a strong defence to a country.

He gave the example of the Soviet Union which broke up despite the fact that it was a nuclear power.

He regretted that no human development was taking place in the country, and called for spending more on social sector instead of defence.

Responding to points raised by Opposition members, Finance Minister Shaukat Aziz claimed that the increase in the defence budget was necessary due to "geo-political situation" of the country.

He said there was a need to modernize all three services of the armed forces as they needed latest technology for air force and navy.

Mr Aziz admitted that pensions of retired military personnel had been included in civilian heads but claimed that it would not be a burden on the civilian exchequer.

Regarding commercial entrepreneurs of armed forces, the minister said the Fauji Foundation was a very old institution set up for the welfare of armed forces personnel. He said they had been doing commercial investment and developing real estate.

He claimed that with the income of these commercial entrepreneurs, several schools and hospital were being run in the country.

About the break-up of the defence budget, he said such things had never been disclosed in the past and these would not be disclosed this time too.

He, however, assured the House that a "proper audit" of the military accounts would be conducted.

Earlier, the Senate adopted a resolution on the TV licence fee withdrawal moved by the opposition members. The resolution was supported by treasury members as well. This recommendation was added to the final recommendations of Senate, which had been finalized on Friday, to be sent to the National Assembly for consideration.

Speaking on the resolution, the opposition members termed the decision of collecting TV licence fee with electricity bills as unwise and unjust.

Kamil Ali Agha and Javed Ashraf Qazi of the ruling Pakistan Muslim League (PML) also called for withdrawal of this decision as it would create more hardships for the people of the country.

Finance Minister Shaukat Aziz said that he would consider this proposal and would talk to Federal Minister for Information Sheikh Rashid Ahmed about it. He claimed that this decision had been taken only to help the people as they had been facing problems due to visits of TV inspectors.

Later, the Senate was prorogued.