Army`s request for Rs 45 billion will strain Pak econ: PM

Pak Army`s request for an additional budgetary allocation of Rs 45 billion for meeting burgeoning security needs will strain the country`s limited financial resources, officials have informed Prime Minister Yousuf Raza Gilani

Islamabad: Pakistan Army`s request for an
additional budgetary allocation of Rs 45 billion for meeting
burgeoning security needs will strain the country`s limited
financial resources, officials have informed Prime Minister
Yousuf Raza Gilani, a media report said on Wednesday.

The government`s economic team led by Finance Minister
Abdul Hafeez Shaikh conveyed this to the premier during a
briefing yesterday, The Express Tribune newspaper quoted
sources in the finance ministry as saying.

The team told Gilani about the "prevailing grave
economic situation" and difficulties in bridging the
ever-widening "gap between national income and expenditure."

The briefing focused on the consequences of delaying
power sector reforms, the fallout of the non-implementation of
reforms in General Sales Tax and the army’s request for
additional funds.

The Finance Minister met the army chief in
Rawalpindi last week to discuss the matter. The Finance
Ministry indicated an additional Rs 10 billion could be set
aside for the army and this would hike the defence budget to
Rs 452 billion, sources said.

The economic team also told Gilani that the only
option for overcoming challenges is to quickly implement
reforms in General Sales Tax and carry forward power sector
reforms.

"The failure to implement the multi-tier power
sector reforms would result in an additional burden of at
least Rs 214 billion on the budget," a participant of the
meeting told the newspaper.

The government`s budget for 2010-11 allocated Rs 442
billion for defence and an additional Rs 225 billion for
military pensions and the war on terrorism.

However, reports have suggested that the defence
allocation could balloon from Rs 442 billion to Rs 580 billion
because of the war on terror and the army’s prolonged stay in
the restive tribal belt bordering Afghanistan.

PTI

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