It is popularly believed that while most states have an army, Pakistan army has a state. This was evident with the defence budget kept beyond the purview of the National Assembly over the past many years ever since the Indo Pakistan war in 1965. The army expected the state to support it without any questions on its profligacy.
Thus it was a notable occasion when, Pakistan's defence expenditure estimates were presented under major heads in the National Assembly this year. The Prime Minister Mr Gillani announced, 'The Ministry of Defence and chief of Army Staff have fully endorsed the revised format of the defence budget estimates.' He indicated that the expenditure had to be sustained as the country could not 'afford to remain oblivious to our defence needs. As a matter of policy, I declare that our defence is based on the strategy of minimum credible deterrence and that we shall not enter into any arms race.'
What was perhaps unstated was that neither Pakistan nor India can afford to enter into an arms race with large percentage of the populations living below the poverty line. Thus this is more of an imposed rather than a strategic choice.
Pakistan's defence budget for the 2008-09 fiscal year starting 1 July was raised by 7.6 percent ' from Rs (Pakistan) 275 billion in 2007-08 to Rs 296.07 billion ($4.4 billion). The increase was claimed to be negligible, due to 10.4 percent inflation, increase in fuel prices and 20 percent increase in pay and allowances. The budgetary allocation of the services for 2008-09 was broken down in seven categories: employee-related expenses; operating expenses; travel and transportation; general; physical assets; other stores and stocks; and civil works. Of Rs 296 billion, a major portion of Rs 294.9 billion have been allocated to military defence and Rs 1.17 billion to defence administration. Of military defence allocation, Rs 99 billion will be spent on employees' related expenses. The operating expenses will be Rs 82.84 billion and the cost of physical assets Rs 87.63 billion. The army will spend Rs 25.73 billion on civil works.
A report in the Daily Times has given the break down in the defence budget thus, 'allocations for the Pakistan Army have increased by 4.31 percent as compared to last year with a grant of Rs 128.699 billion. Of this amount, Rs 71.274 billion has been allocated for employee-related expenses, Rs 22.337 billion for operating expenses and Rs 21.527 for physical assets and other stores and stocks. The budgetary allocation for the Air Force has increased by 5.93 percent in 2008-09 with Rs 71.006 billion, as compared to Rs 67.028 billion allocation in 2007-08'.
The Navy saw the highest increase in allocations by 14.16 percent with a total grant of Rs 29.133 billion, as compared to Rs 25.518 billion in 2007-08. Defence Production Establishment also received a similar boost of 14.48 percent to be allotted an amount of Rs 66.467 billion, Rs 40.129 billion been allocated for operating expenses and Rs 36.342 billion for general expenses.
Major General [Retired] Shujaat Ali Khan writing in the Daily Times justifies the increase in the defence budget on the plea that there is widespread disparity in superiority of 2:1 in land forces and 4:1 in naval and air forces between India and Pakistan. Indian estimates on the other hand do not indicate such a clear superiority. While suggesting that the country cannot afford to go in for an arms race with New Delhi, he feels Pakistan should opt for relative, 'balance between nuclear and conventional forces'. This alone will prevent India gaining an advantage which will lure it into military confrontation perceiving weakness in Pakistan says Shujaat.
Pakistan is spending 4.5 percent of the GDP on defence. For a developing country defence spending over and above 3 percent is considered to impinge on development. The Prime Minister, Syed Yousuf Raza Gilani attempted to turn the Defence Budget into an Indo Pakistan issue by seeking similar reduction from India. Thus speaking in the National Assembly, Gilani promised to freeze allotments for defence and even talked of reduction while hoping, 'We hope to see a reciprocal gesture from our neighbor for the sake of peace and prosperity in the region.'
India's Defence Minister Mr AK Antony reacted, 'India's defence budget ' with an annual allocation of less than 2 per cent of the GDP ' is amongst the lowest in the world. Despite our economic boom, our expenditure is less than 2 per cent of the GDP'. The Defence Minister's assertion is also evident from a survey of the figures where in Indian defence spending, as percentage of GDP, has declined from 3.38 per cent in 1987-88 to 1.98 per cent in 2007-08. Thus the Pakistani establishment may find it difficult to justify defence expenditure vis a vis India, particularly so when the country is spending 4.5 percent of the GDP on defence in a year of decelerating economic growth, increased political instability and rising inflation.