Pak hikes defence budget by 7% amid tensed ties with India

We have increased the defence budget to Rs 920 bn from Rs 860 bn, says Ishaq Dar

Pakistan on Friday proposed to hike its defence budget by nearly seven per cent to Rs 920 billion amid growing tension with India along the Line of Control.

"We have increased the defence budget to Rs 920 billion (from Rs 860 billion)," Finance Minister Ishaq Dar said as he presented the federal budget for 2017-18 financial year in the National Assembly.

Dar also announced a 10 per cent increase of "special allowance" to the armed forces for their contribution in defeating militants throughout operation 'Zarb-e-Azb' launched three years ago.

Pakistan's proposed increase in the defence outlay and for its armed forces came as tension with India soared over a host of contentious issues.

Tensions have run high between India and Pakistan over a host of issues, including the status of Kashmir.

India has accused Pakistan of supporting militants, who infiltrate from the Pakistan-occupied Kashmir into the Valley and target Indian security forces. One such attack in September last year killed 18 Indian soldiers and India retaliated with "surgical strikes" on terrorist launchpads in PoK.

Most recently, the Pakistan Army sentenced Indian national Kulbhushan Jadhav on charges of espionage after a secret trial. India had demanded consular access to Jadhav, which Pakistan repeatedly denied, claiming the man was an Indian spy.

India took Pakistan to the International Court of Justice (ICJ) at The Hague over the matter, which in an interim order stopped Pakistan from executing Jadhav, and said India should have been given consular access as per the Vienna Convention.

India and Pakistan are also at loggerheads over a China- backed economic corridor that runs through PoK. China says it is a developmental project and will aid Pakistan's economy.

Last year, Pakistan recorded a 5.28 per cent GDP growth - the highest in 10 years and the volume of its economy crossed USD 300 billion.

The total estimated outlay of the budget presented today will be 4.75 trillion rupees, according to minister Dar.

The government proposed a six per cent GDP growth for 2017 -18 financial year and the development expenditure for next year will be 1.001 trillion rupees, Dar said.

Infrastructure would get maximum allocation in the development sector, according to Dar.

He said the minimum wage will be set at 15,000 rupees, while announcing a 10 per cent increase in the basic salary of government employees and pensioners.

It was the fifth and last budget of the Pakistan Muslims League-Nawaz government which came to power in May 2013.