Pakistan has announced a significant increase in its defence budget, allocating Rs2.56 trillion for the fiscal year 2025–26. This marks a 20.2% rise compared to last year’s allocation and underlines the government’s ongoing emphasis on national security. The new budget represents 14.49% of the total national budget outlay of Rs17.65 trillion.
This jump in defence spending is primarily due to persistent inflation, the need to maintain operational readiness, and heightened border tensions with India—especially in conflict-prone areas like Sialkot and Neelum Valley. These developments have renewed focus on strengthening the country’s military preparedness and strategic deterrence.
The Rs2.56 trillion allocated falls under the “Defence Affairs and Services” head and covers the core defence services. The previous year’s defence budget stood at Rs2.12 trillion, with a revised estimate of Rs2.18 trillion. The latest allocation shows the government’s intent to ensure the armed forces are equipped and operational at all times.
Within this budget, several key segments have seen notable increases:
• Employee-related expenses for armed forces personnel have been increased to Rs846.03 billion, reflecting a modest 2.3% increase over last year’s revised figure.
• Operating expenses—including training, fuel, and supplies—have risen sharply by 28.8% to Rs704.4 billion.
• Procurement of arms and ammunition, categorized under physical assets, has been allocated Rs663.07 billion, up from Rs550.19 billion.
• Civil works, such as construction and facility maintenance, now stand at Rs336.49 billion, up 30.6%.
On the other hand, the budget for defence administration has slightly decreased by 5.5% to Rs7.95 billion.
Notably, Rs742 billion has been earmarked for pensions of retired military personnel, an amount not included in the official defence budget. This represents a 9.7% increase from last year’s revised pension bill and shows a steady rise in defence-related obligations.
While core spending is rising, development allocations under the Public Sector Development Programme (PSDP) have been reduced. The Defence Division will receive Rs6.03 billion, compared to Rs6.78 billion last year. Allocations for the Defence Production Division have also dropped significantly to Rs1.79 billion, while the Strategic Plans Division—responsible for overseeing Pakistan’s strategic and nuclear programs—saw its allocation slashed to Rs5.42 billion from Rs24.1 billion. Analysts suggest some sensitive spending may now be off the books or moved under classified headings.
The Pakistan Atomic Energy Commission (PAEC) has also seen its development allocation cut to Rs133.4 billion, a drop of 27.7%. SUPARCO’s funding has similarly fallen.
Despite a reduction in the overall national budget, the consistent rise in defence spending highlights the state’s commitment to national security amid a challenging regional environment. When including pensions and development allocations, total defence-related budget spending now exceeds Rs2.9 trillion, reinforcing the sector’s importance in fiscal and strategic planning.