Pakistan Army Budget
Pakistan News

Pakistan Cut The Army’s Budget By RS72 Billion In Order To Finalize IMF Agreement

July 6, 2022 / By Zunair Tahir / Pakistan News



In order to satisfy a key requirement of the International Monetary Fund (IMF) concerning establishing primary budget surplus in the next fiscal year, Pakistan has reduced the armed forces development plan by Rs72 billion or one-fifth of the amount provided on June 10.

One of the key requirements of the IMF for the resumption of the bailout package is having a primary budget surplus of Rs153 billion, or 0.2 percent of the national GDP. Now, Finance Minister Miftah Ismail is hoping to get an agreement on the personnel level by the end of this week.

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The initial budget, which the government presented to the National Assembly on June 10, included Rs363 billion in funding for the initiative to develop the armed forces. On the other hand, the amended budget, which the Ministry of Finance made public after receiving National Assembly approval, shows that the budget provision has been cut to Rs291 billion.

The armed forces development program has been reduced by Rs72 billion, or around 20%. The funding is extra to the standard defense budget. Due to financial restrictions and IMF-imposed restraints, the armed forces development program has been cut for the second time in as many years.

The previous administration had set aside Rs340 billion for this purpose during the previous fiscal year, however the budget records reveal that only Rs270 billion was actually spent. The Express Tribune has previously reported that the previous administration had agreed to cut funding for the military’s contingency duties.

When contacted, a representative of the Ministry of Finance stated that the military development program needed to be scaled back in order to lower total spending levels and put the country in a position to meet the IMF’s main budget surplus objective.

On the strength of provincial cash surpluses of Rs750 billion, the government has set the primary budget surplus target at Rs153 billion, or 0.2% of GDP. However, the provincial budgets do not account for the savings of Rs. 750 billion, and the IMF requested that the government obtain the support of the provinces through memoranda of understanding (MoUs).


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