Pakistan is exploring the possibility of increasing its defence budget by at least 25 percent for the next fiscal year to address escalating security concerns, particularly related to India. The initial plan to raise the budget by 18 percent may no longer be sufficient due to recent developments along the border and the need to enhance indigenous military capabilities. Discussions are underway between the Finance Ministry, Defence Ministry, and the IMF to find fiscal space without compromising budget targets.
The government is also considering asking provincial governments to contribute to the additional defence costs, citing their cash surpluses and the fact that provinces like Punjab and Sindh have been directly affected by cross-border hostilities. Meanwhile, efforts are being made to redirect funds from unproductive subsidies in sectors such as power and banking towards defence spending.
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This move comes after a deadly attack on a school bus in Balochistan, which killed several children and soldiers. The government blamed Indian-backed proxies for the incident, calling it part of an ongoing campaign to destabilize Pakistan through terrorist acts. The increased defence budget aims to strengthen the military’s readiness across all branches.
Prime Minister Shehbaz Sharif has also formed a committee to tackle revenue shortfalls and improve tax collection, which remains a major hurdle in meeting budgetary requirements. The government is focused on balancing the need for heightened defence spending with its commitments to fiscal discipline under the IMF program.
