Pakistan presents new $50 billion development-heavy budget

ISLAMABAD — Pakistan's Finance Minister Ishaq Dar yesterday presented a $50 billion development heavy budget that also promised a seven percent increase in military spending, a growth rate of near 6 per cent and an appeasement for farmers who protested ahead of the budget announcement, clashing with police who used tear gas to disperse them.

The budget offered Pakistan's farmers $6.8 billion in loans, as well as fuel and electricity subsidies.

In poor Pakistan the budget promised $1.15 billion in subsidies, mostly to reduce electricity and fuel costs. In his speech to Parliament Dar said the annual per capita income in Pakistan had increased from $1,334 to $1,629 over the last four years of Prime Minister Nawaz Sharif's government. Tax collection which is notoriously low in Pakistan also increased nearly 80 percent in the same period, he said.

In addition to a seven percent increase in military spending, Pakistan's budget also gave every soldier a 10 percent salary hike for fighting terror. The defense budget was set at $9 billion compared to $8.4 billion last year.

Pakistan's defense budget is not open for debate by Parliament nor does it generally include pensions paid to military personnel. The cost of their pensions comes out of the current budget.

Pakistan has been in a protracted war against terrorists with most battles waged in the tribal regions that border Afghanistan.

yesterday's budget was seen as business friendly, offering a 30 percent tax cut to the corporate sector. It also exempts industries from the country-wide rolling power cuts that afflict Pakistanis on a daily basis.

Of the $20 billion plus development budget, Dar said $1.8 billion will go toward financing projects linked to its multi-billion dollar China-Pakistan Economic Corridor scheme that includes a vast array of joint ventures including roads and power plants.

Opposition politicians slammed the budget, with Asad Umar of the Tehreek-e-Insaf (Movement for Justice) party saying it takes from the poor to give to the rich.

"Money is being snatched from the pockets of the poor and middle classes to enhance the wealth of the unproductive elite," Umar said in a statement.

In a country with a literacy rate of 69.5 per cent among men and 45.8 among women, according to the latest CIA country report, the education budget was set at $887 million, considerably less than the sums allocated for defense and development.

The health sector in Pakistan, often bemoaned by many Pakistanis as inadequate, was allocated $126 million according to the figures released by the government.

Pakistan's protesting famers timed their protest hours before Dar presented the budget for the next fiscal year before lawmakers on yesterday.

Pakistani TV channels broadcast footage showing riot police dragging farmers away from the scene, as well as protesters throwing stones at the police.