ISLAMABAD, 10 June 2007 — Pakistan yesterday unveiled its budget for the coming year, with a big jump in its annual spending plans, hiking civil service pay and funds for education as well as military spending in an election year for both President Pervez Musharraf and his government.
The government announced a record budget of 1.6 trillion rupees ($32.6 billion) for the year 2007-2008, up 21.7 percent from 1.3 trillion rupees in the current fiscal year, which ends June 30.
Government spending has rocketed in recent years as tax reforms and strong economic growth have yielded bumper revenues. Musharraf, who claims credit for the boom, has used the proceeds for a string of major infrastructure projects, such as building dams and roads.
When the minister was delivering budget speech, the entire opposition staged a walk out. Prominent opposition leaders Maulana Fazalur Rehman, Khawaja Asif, Amin Fahim blasted the government for presenting “a mini-budget.”
Critics say the economic expansion has helped a narrow elite and created inflation that makes it hard for the vast majority of Pakistan’s 160 million people to make ends meet. They also criticize continued high spending on the military.
The 2007-08 budget envisages defense expenditure of 275 billion rupees ($4.5 billion), an increase of 10 percent on the previous year.
Other highlights include a 28-percent hike in education funding to 24.1 billion rupees ($400 million), while the health sector would get 10 percent more money.
“Only strong national defense can guarantee peace,” Minister of State for Finance Omar Ayub Khan told the National Assembly in Islamabad.
From July 1, the military will receive 275 billion rupees (about $4.5 billion) as compared to 250 billion rupees ($4.09 billion), Khan said, adding that Pakistan was a nuclear power and that “no one can cast the evil eye on it.”
Plans have been approved for the acquisition of state-of-the-art weapons systems, including about 70 F-16 fighter planes from the United States, reconnaissance planes from Switzerland, several warships from Greece and China, and submarines from Germany or France. Khan said the government would also introduce more subsidies on food items to ease the impact of inflation. Government employees will get a 15 percent pay rise, he said.
“By the grace of God, we are in a position to fulfill our promises. We will provide better heath and education facilities to the people,” Khan told Parliament. “Our economy has shown improvement, and we have more money to spend for the welfare of the people.” Musharraf, who plans to ask lawmakers for a new five-year term this fall, is urging Pakistanis to vote for his supporters in parliamentary elections later in the year, saying they will ward off extremism and keep Pakistan on course for greater prosperity.
