“The budget’s critics within Pakistan have not held back. The Pakistani opposition has aptly dubbed this an “IMF budget,” a blueprint designed not for public welfare but for the preservation of the interests of the elite.”
“In truth, Pakistan’s budget is not a fiscal document but a political declaration, one that exposes a regime trapped in its illusions of power and perpetually playing to the gallery of its military elite.”
In a country teetering on economic collapse, Pakistan has chosen guns over bread. The unveiling of Pakistan’s federal budget for FY2025-26 by Finance Minister Muhammad Aurangzeb has revealed not only the gravity of the country’s fiscal distress but also the dangerous direction its leadership continues to take.
Slashed by nearly 7% from the previous year, the federal budget now stands at PKR 17.573 trillion (Rs 5.27 lakh crore or $62 billion). However, what is most striking is not the contraction itself, but the clear priorities underpinning it: a staggering 20.2% increase in defence spending, with Rs 2.55 trillion (approximately $9 billion) now earmarked for the armed forces, amidst widespread poverty, crumbling infrastructure, and a growing internal insurgency.
Defence outlay alone accounts for PKR 2.55 trillion (Rs 76,800 crore), or 1.97% of Pakistan’s GDP, up from 1.71% last year. The military’s grip over the national purse is even more pronounced when one considers the expenditures kept off the books. Military pensions, amounting to PKR 563 billion (Rs 16,616 crore), are not included in the official defence budget.
Neither are salaries for military personnel, which are concealed under the obscure accounting. Heads like that of the ‘General Public Services-Staff Salaries.’ Even parliamentary scrutiny over such allocations is limited, with briefings held behind closed doors and little room for meaningful oversight. What is publicly declared is only a fraction of what Pakistan truly spends on its armed forces.
The consequences of this militarised budgeting are devastating, and this deliberate obfuscation creates the illusion that defence spending is proportionate and manageable. It isn’t. Pakistan’s military expenditure, when fully accounted for, is significantly higher than what is publicly admitted, and the burden of that excess is falling squarely on its citizens.
Already, 44.7% of Pakistan’s population lives below the poverty line, a figure now expected to rise perilously close to the 50% mark. Sectors vital to human development–healthcare, education, and economic reform–are being systematically underfunded. The message is clear: national security, narrowly defined as militaristic posturing against India, is more important than the welfare of ordinary Pakistanis.
This posture is delusional. In its pursuit of military parity with India, Islamabad appears to have lost sight of economic realities and strategic prudence. In FY2025-26, India allocated Rs 6.57 lakh crore ($78.7 billion) for defence which is nearly nine times more than Pakistan’s total defence budget, and larger than Pakistan’s entire federal expenditure. Of this, $21 billion is earmarked for capital acquisition.
To believe that Pakistan can sustain, let alone win, an arms race against India is not just economically unsound, it is profoundly reckless. Meanwhile, as the military is showered with largesse, the security threats within its own borders remain unaddressed. The Pakistani state continues to face daily assaults from groups like the Tehreek-i-Taliban Pakistan (TTP), persistent separatist unrest in Balochistan, and growing civilian unrest in Sindh over water distribution.
Despite allocations towards key sectors–Rs 14.3 billion for health, Rs 39.5 billion for the Higher Education Commission, Rs 9.8 billion for Daanish Schools, and Rs 4.3 billion for youth training initiatives–the funding remains woefully insufficient to address even the most basic needs of marginalised and underserved regions. The sharp hike in defence spending continues to dwarf developmental priorities, significantly constraining the fiscal space available for essential public services. Additionally, stark provincial disparities persist, with Punjab appearing favoured, while underdeveloped regions like Balochistan, GB, and KP’s merged districts continue to be underfunded.
This fiscal recklessness also exposes a troubling pattern in Pakistan’s relationship with international lenders. Pakistan has sought repeated bailouts from institutions such as the IMF, World Bank, and Asian Development Bank, often presenting developmental project portfolios as justification for meeting the loan criteria. The most recent example is how Pakistan scraps 118 development projects worth PKR 1,000 billion to appease the IMF while preparing to hike military spending.
The obvious question arises: if the money is not being spent on development, where is it going? The answer, increasingly, seems to point toward funding Pakistan’s unaccountable military-security apparatus and by extension, the ecosystem that enables terrorism. Such suspicions are not unfounded. Pakistan’s budgetary sleight of hand, channelling international aid and loans under the guise of public development while expanding the opaque military-industrial complex, raises serious concerns among global stakeholders.
It is not merely a case of misgovernance but one of deliberate diversion. India, and indeed the international community, must recognise that funds extended to Pakistan for humanitarian or development purposes are indirectly subsidising militancy and conflict.
The budget’s critics within Pakistan have not held back. The Pakistani opposition has aptly dubbed this an “IMF budget,” a blueprint designed not for public welfare but for the preservation of the interests of the elite. PTI’s Information Secretary has labelled it “economic gallows” and a “Leela budget,” a theatrical farce where the common man is sacrificed, while elites and the military establishment remain untouched.
Debt now consumes nearly half the federal budget, with Rs 8.2 trillion out of Rs 17.573 trillion earmarked for debt servicing. This includes Rs 7.2 trillion for domestic and Rs 1 trillion for foreign debt repayments. Pakistan’s total public debt now stands at a colossal Rs 76 trillion (over $274 billion), breaching the legal threshold set by the Fiscal Responsibility and Debt Limitation Act.
This long-standing militarisation of Pakistan’s budget has dire implications not just domestically, but regionally. As living conditions in Pakistan deteriorate, there looms the very real threat of mass migration. For India, the concern isn’t merely about numbers, but about intent.
India must remain vigilant that radicalised individuals, some potentially indoctrinated by extremist ideologies, do not slip through porous borders cloaked as refugees fleeing a humanitarian crisis. Strengthening border security, surveillance, and intelligence-sharing will be key in the coming years.
In truth, Pakistan’s budget is not a fiscal document but a political declaration, one that exposes a regime trapped in its illusions of power and perpetually playing to the gallery of its military elite. It is a budget that entrenches dependency, institutionalises poverty, and pushes the state closer to becoming a failed entity. The tragedy is not just in what Pakistan spends, but in what it chooses not to.
In its zealous pursuit of security through military might, Pakistan is eroding the very foundations of national stability: economic viability, social cohesion, and international credibility. And so, the question that haunts the region remains: how long can a state survive when its greatest threat is not external aggression, but its own refusal to prioritise its people?
