Pak ups defence budget by 20% amid border row

Pakistan on Tuesday increased its defence budget by 20 per cent, allocating PRs (Pakistani Rupees) 2,550 billion ($9 billion) for the fiscal 2025-26, amid tensions with India.

Finance Minister Muhammad Aurangzeb presented the PRs 17,573 billion worth federal budget for 2025–26 in the National Assembly. He also presented the budget document as a finance Bill in the National Assembly.

In his speech, the minister said that the government has “decided to allocate PRs. 2,550 for the defence of the country”. He didn’t provide any further details about the defence spending as traditionally the defence budget is not discussed by the parliament.

Last year, the government allocated PRs 2,122 billion for defence, reflecting a 14.98 per cent increase over PRs 1,804 billion budgeted for the fiscal year 2023-24.

“This budget is being presented at a historic time when the nation showed unity [and] determination,” the minister said at the start while mentioning the recent Pak-India conflict.

Tensions between India and Pakistan escalated after the April 22 Pahalgam terror attack, with India carrying out precision strikes on terror infrastructure in Pakistan and Pakistan-occupied Kashmir on May 7.

The on-ground hostilities from the Indian and Pakistan sides that lasted for four days ended with an understanding of stopping the military actions following talks between the Directors General of Military Operations of both sides on May 10.

The defence sector expenses are the second-biggest component of the annual expenditure after the debt payments. Aurangzeb also announced a 4.2 per cent GDP growth target for the economy which is higher than the 2.7 per cent achieved in the current year ending on June 30.