Army to get more funds to beat inflation

‘The budget revision was necessitated by pay raise and erosion in rupee-dollar parity’.

ISLAMABAD:

The government is preparing to allocate more funds to the Pakistan Army in the current fiscal, helping it offset the vagaries of depreciation in rupee value against the greenback and double-digit inflation, The Express Tribune learnt on Monday.

The requisition for additional funds by the defence ministry on the army’s behalf comes at a time finance minister Dr Hafeez Sheikh is in Washington to discuss arrangements for the disbursement of $8.5 billion in loans to bridge the alarming fiscal deficit.

The military leadership had approached secretary defence Lt-Gen Athar Ali and asked him to raise the issue with the government.

An official told The Express Tribune that the cash-starved government was considering diverting the funds from the remaining development budget. Financial wizards, another official said, routinely sacrificed development budget to meet ever-rising non-development expenditures as declining tax collection showed no sign of improvement in the wake of strong political opposition to new taxes.

Meanwhile, officials briefed parliamentarians that the ministry of defence had achieved all targets set for Pakistan Army despite intense pressure on its resources.

Citing various reasons for the revision of budgetary allocation, officials said that the post-budget 50-per cent increase in pay was a major factor. Expenditure toward rations, they said, was borne by the government.

Officials also said that the erosion in rupee-dollar parity had hit military weapons purchase contracts, adding that the army needed additional funding in foreign currency for this purpose.

On April 7, the NA committee on defence was briefed, for the first time, on the budget, wherein they were informed of the shortfalls being faced.

Published in The Express Tribune, April 19^th,  2011.