Pakistan hikes military spending in chaotic budget session
Pakistan Finance Minister Miftah Ismail has, in a chaotic budget session, announced a large hike in military spending for the next fiscal year. He lauded the resurgent Pakistan economy, which has rebounded over the last few years. However, with an election expected in July, Opposition lawmakers didn't take Ismail presenting a full-year budget, kindly. Chaos ensued. Here's more on it.
Ismail, who hails from the ruling Pakistan Muslim League-Nawaz (PML-N), presented the budget amid jeers from and scuffles between lawmakers. Many opposition lawmakers, expressing their dissatisfaction at the full-year budget, walked out of the session. Others tried to storm the podium and disrupt Ismail, but were prevented by a human chain formed by PML-N parliamentarians.
Pakistan's economy has rebounded in recent years owing to a drop in militant violence and massive investments from China for helping alleviate power shortages. The economy is now projected to grow at a 13-year-high growth rate of 5.8% in 2017-18, and will accelerate to 6.2% in the next fiscal. However, a widening current account deficit, and dwindling foreign exchange reserves are casting a shadow.
Pakistan saw tax revenues increase to 13.2% of the GDP, up from 10.1% in 2012-13. A budget document further detailed that total tax receipts for 2017-18 would reach 4.2 trillion Pakistani rupees, barely falling short of the government target. The increase was described as "unusual".
Ismail's budget saw Pakistan's defense budget being increased by 20%, to 1.1 trillion Pakistani rupees from 920 million Pakistani rupees last year. The increase comes on the back of the US suspending $2bn worth of military assistance to Pakistan, citing Pakistan's apathetic approach towards combating terror. However, it's not clear why Pakistan's military budget exceeded its planned outlay.
The increase in its military spending comes at a time of strained relationship between the ruling PML-N and Pakistan's powerful military establishment which had ruled it for nearly half of its history. Senior PML-N officials had complained about military interference trying to weaken the party ahead of the expected polls. The military, however, denied all allegations of involvement in politics.
