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Real figure of defence budget
Saturday, June 12, 2010
By Ansar Abbasi
ISLAMABAD: Principal Economic Adviser to the Finance Ministry Saqib Sheerani has said the total defence budget for the next fiscal year is around Rs 675 billion and not Rs 442 billion.
Talking to The News, Sheerani said the defence budget was not reflected under one head in the budget but was distributed in three different heads. He was explaining why the IMF shows Rs 593 billion as the total defence spending for the outgoing year as against Rs 378 billion shown in the latest budget books.
He explained that for the outgoing fiscal year, Rs 378 billion was shown under the main head of the defence budget whereas over Rs 200 billion was reflected under two other heads pension spending and war on terror contingency head. He said the government had also to pay for some legacy expenditures like purchases of some defence hardware for which the deals were struck during the Musharraf tenure.
He said now like the present concluding fiscal year, the next budget too contained the total allocation of the defence budget in three different heads. He said besides Rs 442 billion that is announced as defence budget for the next fiscal year, almost Rs 225 billion was also allocated for pension and under the head of the war on terror contingency.
The IMF website reflects Rs 593 billion as defence spending but the number announced in the budget is Rs 378 billion for the outgoing fiscal year. Similarly, the finance minister announced 4.1 per cent GDP growth for the year ending June 30, 2010 but the IMF website reflects 3 per cent GDP growth rate.
In yet another case of budget contradictions, the announced budget shows 5.1 per cent budget deficit for the outgoing year but the pre-budget cabinet meeting that approved the budget 2010-11 was shown the deficit of 5.3 per cent by the Finance Ministrys summary.
Whether one calls it a jugglery of words or budget fudging but Secretary Finance Salman Siddiq sees these contradictions as a matter of routine. This is just a mathematical thing, he said, adding like Japan, Pakistan is following a system where the figures get matured and final in three years.
He explained that like Japan, Pakistan follows a system where the GDP gets finalised in three years. In the first year, the figures are estimated and in the following year we get the provisional figures while in the third year the final figures get matured.
Referring to the contradictions in the figures as reflected in the budget, the IMF website and the cabinet summary, he said the figures really dont matter as the IMF precisely knows that our fiscal deficit is Rs 783 billion.
