• Rs2.55tr allocation is 20pc higher, biggest annual hike in a decade
• Military budget jumps to 1.97pc of GDP, up from 1.7pc last year

ISLAMABAD: The federal government on Tuesday proposed an allocation of Rs2.55 trillion for the country’s armed forces in the fiscal year 2025-26, marking the highest annual increase in defence spending in over a decade, amid heightened tensions with India and last month’s military clashes between the two nuclear-armed neighbours.

The new allocation represents a 20.2 per cent rise over the previous year’s budget of Rs2.122tr, pushing defence spending to around 1.97pc of GDP — up from 1.7pc last year — as it inches back to 2pc after years of incremental decline. The increase also contrasts with the decline in national spending on health and education in terms of GDP, with figures for the first nine months of the outgoing fiscal year well below 1pc.

The defence spending hike also means a rise in its share of the total federal outlay to 14.51pc, the highest in recent years.

Presenting the budget in the National Assembly, Finance Minister Muhammad Aurang­zeb said, “The security situation in the country is precarious and the armed forces have rendered commendable service in protecting........

© Dawn Business