Pakistan defence sector continues to enjoy grants, subsidies despite economic crisis

As Pakistan always cries for funding in the name of development and disaster management, the so-called defence sector of the country continues to enjoy grants, subsidies and loans despite the financial crunches.

A Canada-based think tank International Forum for Rights and Security (IFFRAS), has highlighted the freebies to the elite military of the country. According to it, defence and debt servicing make up about 58 per cent of the budget for 2022-23, which is an increase of 24.3 per cent over the previous year.

While the funds for development expenditure have been cut in Pakistan and subsidies withdrawn for items like petroleum products and electricity, the defence sector continues to enjoy grants, subsidies and loan write-offs to the tune of PKR116 million in the current fiscal year.

The Pakistani Armed Forces also generate additional sources of income through their public sector enterprises and their business welfare models. These have been traditionally exempted from excise and taxation, as per the think tank.

Report says that in 2021-22 alone, PKR26 billion (USO 110 million) worth of tax exemptions were given to military-managed business entities. Apart from these direct expenditures, a large number of military related requirements are cross subsidized and met through funds allocated to other ministries.

IFFRAS reported that Pakistan which has been continuously plunging from one economic crisis to another, the deliberate opaqueness built into the defence expenditure needs to be addressed holistically to ensure economic security.

At present, Pakistan has been witnessing the devastating floods which impacted the country’s economic situation.