Pak defence spending exceeds budgetary limits by Rs 60 bln

Under a federal spending plan put in place by the finance ministry, defence expenditure in the first six months of the financial year should have been around Rs 175 billion but actual spending had exceeded Rs 235 billion, a senior unnamed official was quoted as saying by Dawn newspaper.

The government had envisaged Rs 442 billion as defence spending for the current fiscal year.

Higher than expected expenditure on defence and lower than anticipated revenue collection in the first half of the year were offset by a tight squeeze on the development programme that has been restricted to Rs 88 billion in almost seven-and-a-half months of the year, the official said.

As a result, fiscal deficit has been contained below 2.9 per cent of the GDP.

A portion of security spending is treated separately as grants because of "unusual one-time" fiscal requirements to restore peace in the tribal region bordering Afghanistan, the official said.

With this pace of spending, the country's annual defence expenditure could cross Rs 580 billion, against Rs 552 billion estimated by the International Monetary Fund and the budgeted allocation of Rs 442 billion.

The ministry of finance had put a restriction on ministries, divisions and other arms of the federal government in August last year to limit their expenditures to 40 per cent of the approved annual budget during first half of the year.

Under that condition, the government should have released about Rs 115 billion for development schemes in the first six months but total releases under this head amounted to about Rs 88 billion in over seven months.

The finance ministry's guidelines for current expenditure require all government agencies and ministries, including the President and Prime Minister, to keep expenditure at 20 per cent each for the first and second quarter of the fiscal year and 30 per cent each in the third and fourth quarter, the official said.