ISLAMABAD:
The government on Tuesday approved a supplementary budget of 50 billion rupees for the armed forces to strengthen security at international borders, modernize naval bases and continue to protect foreign commercial interests in Pakistan.
Of this, 39 billion rupees were allocated to the army and just under 11 billion rupees to the navy, according to a decision by the Economic Coordination Committee (ECC) of the cabinet.
The ECC meeting, chaired by Finance Minister Muhammad Aurangzeb, considered proposals related to reforms in national security, defence, food security and the oil sector, the Finance Ministry said.
“The ECC approved a summary of the Defense Division, providing an additional technical grant of Rs 50 billion for various approved projects in the defense services,” the statement added.
These funds are allocated each year to projects outside the regular defense budget. Last financial year, the ECC had approved Rs 45 billion for similar initiatives.
The ECC approved Rs19 billion for the Special Security Division South, an increase of 19 percent from a year ago. The Southern Special Division is responsible for protecting foreign business interests in the southern regions.
An additional Rs 8 billion was provided to the Northern Special Security Division, which is responsible for protecting people in the northern regions. The amount was equal to last year. The ECC approved Rs9.9 billion in lieu of its allowance for internal security duties, which was also equal to last year’s expenditure.
An amount of Rs2 billion has been approved to manage the fencing of international borders with Afghanistan and Iran. The fences were erected on the borders with Afghanistan and Iran to control smuggling and illegal movements of foreign nationals.
The ECC approved Rs 11 billion for the Navy for modernization of two bases. Pakistan Air Force will receive Rs 150 million for internal security allowance. For the current financial year, the National Assembly approved a defense budget of Rs 2,556 billion for the regular expenditure of the three armed forces.
In another summary submitted by the Ministry of Interior, the ECC approved a supplementary budget of Rs 841.6 million to support border control operations, internal security and maintenance of law and order by the federal civilian armed forces.
New public sector enterprise
The Finance Ministry said the ECC deliberated on a summary presented by the National Ministry of Food Security regarding the liquidation of the Pakistan Agriculture Storage and Services Corporation (Passco) and the establishment of a new company.
The committee approved the establishment of the Wheat Stocks Management Company (WSMC) with an authorized capital of Rs350 billion. A Grade 20 officer from the National Ministry of Food Security has been appointed as the first Director General of the WSMC.
WSMC’s tasks include raising new loans from commercial banks to repay Passco’s debts. Passco’s outstanding liabilities stand at 528 billion rupees, but government estimates suggest that more than 400 billion rupees would be settled through receivables and the sale of wheat stocks.
The Ministry of Finance will provide sovereign guarantees against the loans that the new company obtains. The government will allocate money in the budget each year to repay the principal and interest of loans to be taken out to settle Passco’s debts.
The government had abruptly closed Passco without first finding an alternative to settle the storage company’s assets and liabilities. It has now decided to hand over wheat procurement to designated private entities and create a new company to manage the assets and liabilities.
The ECC also approved the exemption for the new company from the applicability of the Public Enterprises Act, 2023, on the grounds that the new public sector enterprise would not carry out any commercial activities and would only deal with outstanding debts.
The ECC approved a supplementary budget of Rs100 million at the request of the Ministry of Interior for the maintenance and repair of defense equipment used by the federal civilian armed forces.
