ISLAMABAD:
The government on Tuesday approved a Rs 50 billion supplementary budget for the armed forces to strengthen security at international borders, upgrade naval bases and continue to protect foreign business interests in Pakistan.
Of the total, Rs 39 billion has been allocated to the army and just under Rs 11 billion to the navy, according to a decision by the cabinet’s Economic Coordination Committee (CEC).
The ECC meeting, chaired by Finance Minister Muhammad Aurangzeb, considered proposals related to national security, defence, food security and oil sector reforms, the Finance Ministry said.
“The ECC approved a summary of the Defense Division, providing a supplementary technical grant of Rs 50 billion for various approved projects of Defense Services,” the statement added.
These funds are allocated annually for projects outside the regular defense budget. Last fiscal year, the ECC approved Rs 45 billion for similar initiatives.
The ECC approved Rs 19 billion for the Southern Special Security Division, up 19% from a year ago. The southern special division is responsible for protecting foreign business interests in the southern regions.
Another Rs 8 billion was given to the Northern Special Security Division, which was responsible for protecting them in the northern areas. The amount was the same as last year’s allocation. The ECC approved Rs 9.9 billion in lieu of its allocation for internal security duties, which was also equal to last year’s expenditure.
An amount of Rs 2,000 crore was approved to manage the fencing of the international borders with Afghanistan and Iran. Fences have been erected on the borders with Afghanistan and Iran to control smuggling and illegal movement of foreign nationals.
The ECC approved Rs 11 billion to the navy for the upgradation of two bases. Pakistan Air Force will receive Rs 150 million for allocation for internal security tasks. For the current fiscal year, the National Assembly had approved Rs 2.556 trillion in a defense budget for the regular expenditure of the three armed forces.
In another summary submitted by the Ministry of Home Affairs, the ECC approved an additional budget of Rs 841.6 million as supplementary budget to support border control operations, internal security and maintenance of law and order by the federal civil armed forces.
New public sector company
The Finance Ministry said the ECC deliberated on a summary submitted by the Ministry of National Food Security on liquidation of Pakistan Agricultural Warehousing and Services Corporation (Passco) and establishment of a new company.
The committee approved the formation of Wheat Stocks Management Company (WSMC) with an authorized capital of Rs 350 billion. A grade 20 official from the Ministry of National Food Security has been approved to be the first executive director of the WSMC.
WSMC’s tasks include obtaining new loans from commercial banks to pay off Passco’s liabilities. Passco’s outstanding liabilities amount to Rs 528 billion, but government estimates suggested that more than Rs 400 billion would be settled from accounts receivable and by selling wheat stocks.
The Ministry of Finance will issue sovereign guarantees against the loans that the new company will obtain. The government will allocate money in the budget each year to pay the principal and interest on loans that will be taken to settle Passco’s obligations.
The government had abruptly shut down Passco without first finding an alternative to liquidate the storage company’s assets and liabilities. It has now decided to hand over the wheat supply business to designated private entities and create a new company to handle the assets and liabilities.
The ECC also approved exemption for the new company from the applicability of the State Enterprises Act, 2023 on the grounds that the new public sector company would not carry out any kind of commercial activity and would only take care of the outstanding obligations.
The ECC approved a supplementary budget of Rs 100 million at the request of the Ministry of Home Affairs for the maintenance and repair of defense equipment used by the federal civil armed forces.
