Business

Economic briefing: ‘Army wants Rs45b additional funds’

Finance ministry indicates the move will put tremendous strain on available resources.

Shahbaz Rana December 15, 2010

ISLAMABAD: The Pakistan Army’s request for an additional budgetary allocation of Rs45 billion for meeting the burgeoning security needs will strain the country’s restricted financial resources, Prime Minister Yousaf Raza Gilani’s economic team informed him on Tuesday.

The team, led by Finance Minister Dr Abdul Hafeez Shaikh, told the prime minister about the “prevailing grave economic situation” and difficulties in bridging the ever-widening “gap between national income and expenditure”.

Sources within the finance ministry told The Express Tribune that the briefing focused on consequences of delaying power sector reforms, the fallout of the non-implementation of General Sales Tax (GST) and the Pakistan Army’s request for additional funds.

Sources said that last week, Shaikh met the army chief in Rawalpindi to discuss the matter. The finance ministry indicated that an additional Rs10 billion could be set aside, which will jack up the defence budget to Rs452 billion, sources said. Army’s spokesperson Maj-Gen Athar Abbas could not be reached for comment.

Sources said that the finance ministry told the prime minister that the only option for overcoming challenges was to quickly implement GST and carry forward power sector reforms.

“The failure to implement the multi-tier power sector reforms would result in an additional burden of at least Rs214 billion on the budget,” a participant of the meeting told The Express Tribune.

According to an official handout, Gilani has given the ministry of water and power a week to finalise the constitution of boards of directors of electricity generation companies. He also asked the ministry to meet provincial governments and the Karachi Electric Supply Company (KESC) to resolve issues. The finance ministry has also been told to meet them.

The finance ministry also briefed the prime minister about the fallout of not implementing GST. “It will immediately result in the blockage of foreign funding that will shift the entire burden of budget financing on the domestic market,” Finance Secretary Salman Siddique was quoted as telling Gilani. The ministry said that the government would be left with no option but to borrow over Rs1 trillion from the domestic market which will result in high inflation and loss of jobs in the private sector due to unavailability of money for business.

Published in The Express Tribune December 15^th, 2010.

COMMENTS (21)

Khalid Aziz | 13 years ago | Reply "army needs a much bigger budget because of the war v r fighting..i think so v shuld stop criticising the army" ABDULLAH- I think lets leave all the resources for 6-7 lac army and the remaining should do "Hijrat"- sunnah of the prophet (SAW) to let Abu Jahal enjoy lil more.

abdullah | 13 years ago | Reply army needs a much bigger budget because of the war v r fighting..i think so v shuld stop criticising the army and look into the coruption of 200 billion rs done on the karachi ports and the tax not paid .a total of 750 billion rs of corruption is done during the 3 yrs of our so called democracy. v have to fight this war for our own survival.ask the children of those army men who r fightin on the borders as we sit in lahore and karachi....find the reality b4 comenting

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Raqib Ali | 14 years ago | Reply We should first give 10 Billion Rupees taken off from Universities. Education first!

J.Oberoi | 14 years ago | Reply Just google for "Zulfikar Ahmed Pakistan Army" and you'll realize why Pakistani Army's 'internal matters' is not so internal after all. The lines of state and non-state 'actors' are almost non-existent these days.

Aamer | 14 years ago | Reply @Nadeem I think the Army first needs to ask the Americans to provide the CSF, for the Pak Mercenaries rented to them for 7-8years now instead of burdening the economy. On the other hand would it not be better that some Generals also sacrifice their resources for Pakistan, like politicians are pushed to do.

shumayel | 14 years ago | Reply those who are criticizing this have a shallow understanding of things and are giving wrong solutions. rather than squeezing army's pockets why don't you talk of that proven corruption going on in the name of this drama of democracy. Pakistan has become almost the most corrupt country of the world because of massive corruption in last few years under current government, and that's not mere talk but proven fact. all the world is talking of it. why not bring these shameless corrupt imposed politicians in courts and tell them to empty the looted monies. now, you all know that's the real problem, not army spending money to defend the nation and country. stop being illogical. if you don't have money you don't burrow your heads in sands and stop spending on legitimate needs, rather you start thinking of ways to generate money and see whats going on wrong and where - that's how you confront situations. talk of improving economy and industry and taxation and all which has been choked down deliberately, talk of ending corruption, talk of boosting economy and talk of bringing honest people. the last thing saving pakistan is army and some people still can't have enough of this racial bashing. grow up.

ADNAN SWATI | 14 years ago | Reply 45 billions as additional budget. on other hand HEC was given rs 30 billion after many days protest as full year budget

Nadeem Ahmed | 14 years ago | Reply Armed forces are fighting a very long and bloody war, compared to which budget allocations are simply peanuts. For more clear picture, compare these expenses with NATO forces. The demand of our armed forces is legitimate and genuine and must be met by civil government.

Mulla Toofhan | 14 years ago | Reply Getting the Lion share of the Budget and still need more, Pakistan Army owes an explanation to the nation and the people. WHY MORE. The Armed forces are still following The British Raj standards, havings Batmans, orderlies and a Lavish GHQ, They need to practice Austerity. How about trying to fund it through their own business first and if they cannot then " restructure" is in order. We will always remain a Third world if we don't adapt and open our selfs to change.

vasan | 14 years ago | Reply To All the Indian bloggers: Do we need to comment on internal issues of Pakistan like this issue. Isnt it their look out.

Sankalp | 14 years ago | Reply Rs45 billion for meeting the burgeoning security needs! Wonder what security needs, when they can not even control some of the known local insurgents doing severe damage to the country. Talk about eating up ones own economy.

J.Oberoi | 14 years ago | Reply "Who would the poor man ask if he needs another roti…?" Well said Ali M. That is as poignant a comment as I'll ever hope to see here. You're right about the real casualties being the poor man who is trying to feed his family against all odds.

Anoop | 14 years ago | Reply "The Pakistan Army’s request for an additional budgetary allocation of Rs45 billion for meeting the burgeoning security needs will strain the country’s restricted financial resources" --> Only 40% of the budget is left for development,rest are taken up by Defence and Debt Servicing. Army should now handle the budget from now on and give some money to the 'bloody Civilians'.

Ali M | 14 years ago | Reply Who would the poor man ask if he needs another roti...? Totally agree with Haris

Syed Nadir El-Edroos | 14 years ago | Reply Will the lack of resources for the military encourage people to pay their taxes and their electricity bills? NOT! empty slogens and proclamations of blind support for the military will have to do

Apeman | 14 years ago | Reply Well, since we're all asking. May I have Rs 2 billion from petty cash? I promise not to return it.

Haris Chaudhry | 14 years ago | Reply How about the army sells the millions of prime real estate plots it has in cantonments across Pakistan and raises the extra funds required.. 500 billion rupees wasted on a bloated force so out of times with reality and totally agnostic of the suffering of the tens of millions of masses. Big salute the to the billionaire generals of Pak Afwaj ! Its about time you guys are challenged and asked to fall in line like the rest of the populace. Haris

J.Oberoi | 14 years ago | Reply Why don't they make Kayani the Finance Minister so he can help himself and the Pakistani people can have what is leftover.

Saad Duraiz | 14 years ago | Reply The difference in the content of this report and how it's title has been sensationalised is just too much. The reporter has made it sound as if this is a case of extortion. Who else would the Army ask if it requires additional funds?

Rana Amjad | 14 years ago | Reply Instead of decreasing defence budget we are increasing it! Where the money going to come from? Obviously from your & my pockets. What are we going to do with F-16s, Atomic Sub-marines, atomic bombs, tanks & other big boy toys. Even to keep them operational, you need billions of dollars. Have we not learned any lesson from the collapse of Soviet Union?

enough is enough | 14 years ago | Reply Army just got a budget increase in September for $1 billion http://www.bbc.co.uk/news/business-11391644. Already development spending has been slashed, the common man is suffering under immense burdens and Pakistan is facing serious economic crisis.

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