Govt 'increased fiscal space' in budget to provide funds to meet essential defence needs: Pak PM

Islamabad, Jun 18 (PTI) Prime Minister Shehbaz Sharif on Wednesday said his government “increased fiscal space” in the budget to provide funds to the armed forces to meet the essential defence needs.

Pakistan on June 10 increased its defence budget by 20 per cent, allocating PKR 2,550 billion (USD 9 billion) for the fiscal year 2025-26, amid tensions with India. It is the second largest spending after the more than PKR 8 trillion allocated for debt servicing.

Addressing a Cabinet meeting in Islamabad, Prime Minister Sharif said, "The government increased the fiscal space to meet the requirements of the valiant armed forces of Pakistan with regard to necessary equipment.” Last year, the government had allocated PKR 2,122 billion for defence, reflecting a 14.98 per cent increase over PKR 1,804 billion budgeted for the fiscal year 2023-24.

The prime minister also talked about the budget and tax issues, saying that the government has informed the International Monetary Fund against imposing taxes on the agriculture sector, including levying taxes on fertiliser and pesticides, and the lender “accepted our request,” for which he expressed gratitude to the IMF, Radio Pakistan reported.

The government last week unveiled a PKR 17.5 trillion budget for the fiscal year 2025-26 beginning from July 1. It is being discussed in the parliament and is expected to be passed before this month-end.

Sharif also termed the situation in the Middle East as alarming, saying that the Iran-Israel conflict posed a serious threat to regional and global peace.

He termed Israeli attacks on “brotherly" country Iran as "blatant aggression” and reiterated Pakistan's complete solidarity with Iran and its people against the aggression.

The prime minister strongly condemned the Israeli attack on Iran and urged the international community to make efforts to broker an immediate ceasefire. PTI SH SCY SCY