Pahalgam aftermath: Pakistan cranks up defence spending by 18% as tensions with India boil over

Pakistan's coalition government has endorsed an 18 per cent increase in defence spending to over Rs 2.5 trillion in the next budget due to tensions with India, according to a PTI report dated Tuesday that cited media reports.

The government is set to unveil the 2025-26 budget in the first week of the next month, ahead of the start of the new fiscal year from July 1.

Nuclear-armed neighbours India and Pakistan have witnessed heightened tensions since the April 22 terror attack in Jammu and Kashmir's Pahalgam that killed 26 people.

The Pakistan Peoples Party (PPP) delegation, led by its chief Bilawal Bhutto Zardari, met with Prime Minister Shehbaz Sharif and his economic team to discuss the budget matters on Monday, according to a report from The Express Tribune.

The Pakistan Muslim League-Nawaz (PML-N)-led government shared roughly Rs 17.5 trillion worth of new budget framework with its key ally, the PPP, which agreed to the 18 per cent increase in the defence outlay.

There was a consensus between the PML-N and the PPP to increase the defence budget due to the recent wave of tensions with India, the newspaper said, quoting sources.

They said that the PPP backed the proposal to increase the defence budget by 18 per cent to over Rs 2.5 trillion in the light of the prevalent security threats.

For the current fiscal year 2024-25, the government allocated Rs 2,122 billion for defence spending, reflecting a 14.98 per cent increase over the Rs 1,804 billion that had been budgeted for the outgoing fiscal year 2023-24.

Defence sector expenses are the second largest component of the country's annual expenditure after the debt payments. In the current year, Rs 9,700 billion allocated for debt servicing constitutes the single biggest expense of the country.

The size of the budget is lower than Rs 18 trillion, which is less than this year's budget due to a steep reduction in the interest expenses accompanying an 11 per cent cut in policy rates by the central bank, the newspaper added.

On April 23, India announced a slew of punitive measures against Pakistan, including the suspension of the Indus Waters Treaty, closure of the only operational land border crossing at Attari and a major downgradation of diplomatic ties in view of cross-border links to the attack. In response, Pakistan shut its airspace to Indian airlines and suspended all trade with India, including via third countries.

Pakistan on Monday conducted a successful training launch of the 'Fatah series' surface-to-surface missile with a range of 120km, while on Saturday, it conducted a successful training launch of the Abdali Weapon System, a surface-to-surface missile with a range of 450km.

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