• The allocation of RS2.55tr is 20pc higher and larger annual increase in a decade
• The military budget jumps at 1.97pc from GDP, compared to 1.7pc last year
Islamabad: The Federal Government on Tuesday proposed an assignment of RS2.55 billion for the country’s armed forces in fiscal year 2025-26, marking the greatest annual increase in defense spending in more than a decade, amid high tensions with India and military clashes last month between the two nuclear neighbors.
The new allocation represents an increase of 20.2 percent with respect to the budget of the previous year of RS2.122TR, which carries the defense expenditure to around 1.97pc of GDP, compared to 1.7 % of last year, since it dates back to 2 percent after years of incremental decrease. The increase also contrasts with the decrease in national health and education in terms of GDP, with figures during the first nine months of the outgoing fiscal year well below 1 percent.
The increase in defense expenditure also means an increase in its participation of total federal disbursement to 14.51PC, the highest in recent years.
When presenting the budget at the National Assembly, the Minister of Finance, Muhammad Aurengzeb, said: “The security situation in the country is precarious and the Armed Forces have provided a commendable service to protect borders.”
The military assignment is in the context of high regional tensions, including clashes with India in May 2025 and a 9.5pc concurrent increase in the Indian Defense Budget at 6.81 TTR Indian Rupees. Internal security operations in Khyber Pakhtunkhwa and Baluchistan have also contributed to the increase in safety spending, although internal security spending is fulfilled with a separate budget manager.
The RS2.55TR defense allocation, around $ 9.18 billion, includes key increases in operating and infrastructure expenses. Operating costs, covering fuel, rations, training and medical treatment, will increase 37.22PC to RS704.4bn. Civil works, such as infrastructure development, will increase by 37.4pc to RS336.5bn.
A 3.8PC increase for employee -related expenses, which cover salaries and assignments for military, with RS846.03BN for this purpose, has been proposed. The Minister of Finance said that the officers, the Junior commissioners and the soldiers would receive a special allocation of relief, financed from the defense budget.
Expenditure on physical assets, which covers the acquisition of weapons and equipment, is established to rise 20.9pc to RS663.1bn. It is believed that large -scale military acquisitions and funds for the country’s nuclear and missile programs are channeled through classified allocations that are not reflected in the published defense budget.
Employee -related expenses, representing 33.18 percent, remain the largest part, although decrease from 39 percent in fiscal year 2015. Operating expenses now take 27.62PC, compared to 25 percent in the outgoing year.
Physical assets, meanwhile, claims 26pc, which is a slight increase of 25.8pc in 2024-25. The civil works would receive 13.2pc, which would rise from 11.5pc, underlining a growing emphasis on construction and military facilities.
Compared to the outgoing year, the participation of employee -related expenses has decreased by 5.82 percentage points, while operating expenses and civil works have won 2.62 and 1.7 percentage points, respectively, indicating a reallocation of resources to address the highest security needs in the midst of regional tensions.
The assignments in terms of service are the following: Army, RS1.17TR (45.9pc of the total); Pakistan Air Force, RS520.75bn (20.4pc); Navy, RS265.97bn (10.4pc); and organizations between services, RS498.11bn (19.5pc). All services received around an increase of 15.45 percent, with the slightly higher increase in the 15.84pc army.
A more detailed examination of the RS Defense Assignment of 2.55 billion reveals an unclean amount of RS 95.17 billion, since the combined allocation for army organizations, PAF, the Navy and inters services Totalizes RS 2.45483 billion. This discrepancy suggests that unclean funds can be directed to operating costs not directly linked to specific services.
In addition to the defense budget, RS1.055TR has been reserved for military pensions, an increase of 4.04PC compared to the previous year. While they are not part of the defense budget, military pensions constitute approximately 6pc of the total RS17.573Tr federal.
The latest figures suggest a continuous change of the trend of a decade of modest annual increases of around 11pc, with the 2025-26 walk being the third consecutive increase of what had become an annual increase of routine.
The increase seems to be driven by the evolutionary security needs of Pakistan, regional dynamics and a boost to modernize and maintain preparation in all branches of the military.
Despite the increase, Pakistan’s defense expense remains considerably lower than that of India, whose military expenditure is almost nine times higher in terms of dollars.
According to the report of the Peace Research Institute of Stockholm in April 2025, the military spending of southern Asia continues to increase due to geopolitical rivalries and modernization initiatives throughout the region.
Posted in Dawn, June 11, 2025
