Defence expenditure takes only 3pc of GDP: Dr Ishrat Husain

[Zarvan]

https://nation.com.pk/NewsSource/web-desk
Web Desk
11:38 AM | October 19, 2018




Prime Minister Imran Khan's Adviser on Institutional Reforms and Austerity, Dr Ishrat Husain , said that defense expenditure takes up only three per cent of the gross domestic product (GDP).

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While speaking at the Pakistan Policy Symposium on Thursday Dr Husain remarked that Pakistan's defense expenditure is not the big elephant anymore, it is the payment of debt amounting up to Rs1,500 billion that is the country's major challenge.

He said, "Rs1,500 billion out of Rs4,500 billion we collect, goes on debt servicing cost, which is the big elephant,” adding, "That can only be tackled if we reduce our borrowing, both external and internal."

Moreover, he stated, "We decided to approach the International Monetary Fund (IMF) as our financial gap is wide."

Dr Husain assured that public interest would be considered during talks with IMF, after which the World Bank and other international institutes would also come forward to help Pakistan.

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Meanwhile, speaking about the electricity crisis which the country is facing, the former governor State Bank of Pakistan said it was under control, but the country was facing issues because of some distribution companies.

“The problem is in the distribution companies. Out of the nine companies, four are causing 75 per cent of the losses."

Husain continued, "All the deficit which is being accumulated in circular debt is originating from these four companies.”

He added, “So they have to find specific solutions either to privatise those to give them to management contracts or bring about new managers.”

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Furthermore, Dr Husain said, a decision has been taken to reform the Federal Board of Revenue on technical grounds so that the money collected in taxes can be increased and those defaulting on payment can be identified.

"In Pakistan, only 3.5 million people pay taxes out of 12 million. We have to increase the Tax to GDP ration," he added.

https://nation.com.pk/19-Oct-2018/defence-expenditure-takes-only-3pc-of-gdp-dr-ishrat-husain

 

[UKBengali]

Well 3% of GDP is around 20% of the total revenue that Pakistan earns every year.
Add in another 1% for the cost of nuclear weapons that I believe is separate to defence budget.
Then there is 5% of GDP just for debt servicing.

Defence and debt servicing means less than half of the revenue that Pakistan earns can be spent on actual development activities like infrastructure, education, health etc.

 

[Kabira]

But they forget to mention that Pakistan tax to GDP ratio is barely 11% vs 17% for India. Fact is Pakistan spend 30% of tax revenues on defence. For India % spent on defence will be much less.

“The problem is in the distribution companies. Out of the nine companies, four are causing 75 per cent of the losses."

Husain continued, "All the deficit which is being accumulated in circular debt is originating from these four companies.”

Let me guess Quetta, Peshawar, Hyderabad. @ziaulislam still blaming N league for circular debt? lol

 

[Zarvan]

But they forget to mention that Pakistan tax to GDP ratio is barely 11% vs 17% for India. Fact is Pakistan spend 30% of tax revenues on defence. For India % spent on defence will be much less.



Let me guess Quetta, Peshawar, Hyderabad. @ziaulislam still blaming N league for circular debt? lol

PML N was in Federal Government as well as Baluchistan so yes they are responsible for most of the mess when specially your sitting PM and CM of a province were busy taking bribes for K electric and other stuff. And we don't spend 30 % of our Tax money on Defence. Problem is one section who has habbit of keep lying about Army budget continues to do so.

 

[Kabira]

PML N was in Federal Government as well as Baluchistan so yes they are responsible for most of the mess when specially your sitting PM and CM of a province were busy taking bribes for K electric and other stuff. And we don't spend 30 % of our Tax money on Defence. Problem is one section who has habbit of keep lying about Army budget continues to do so.

LOL 2 months have passes but circular debt is increasing more then ever. What PTI have done to stop theft? Army do spend 30% of tax revenues on defence.

 

[Zarvan]

LOL 2 months have passes but circular debt is increasing more then ever. What PTI have done to stop theft? Army do spend 30% of tax revenues on defence.

Army doesn't spend 30 % of Tax money on defense and again you are spreading fake figures. And it's 60 days. Lot of things are happening new money laundering laws are being brought. Land recovered from Mafia. Deals with UK and UAE being made to go after Tax evaders. But when you have served MAFIAS like PML N and PPP for past several decades you should be the last one to ask what PTI is doing. They are doing much better than PML N. In just 60 days Land which is worth Billions recovered from Qabza Mafia in Islamabad and Punjab. By the way ask your beloved PML N khanzeers why they were busy taking bribes from Abhaaj Group head.

@The Eagle @Horus @Path-Finder @Tipu7 @Sulman Badshah

 

[ziaulislam]

But they forget to mention that Pakistan tax to GDP ratio is barely 11% vs 17% for India. Fact is Pakistan spend 30% of tax revenues on defence. For India % spent on defence will be much less.



Let me guess Quetta, Peshawar, Hyderabad. @ziaulislam still blaming N league for circular debt? lol

facts are facts..its federal issue so responsible is PML N/or the federal govt
facts also show that biggest defaulters are provincial govts including punjab and azad kashmir and baluchistan(PML N had it for four years)

reality is cost of generation is one reason too, PML N slept for first 2 years than suddenly jumped on LNG wagaon in its last 2 years and did nothing in transmission

now who is responsible for gas debt of 150+ billion rupees?

just go and read the WSJ news on K electric...

 

[Kabira]

facts are facts..its federal issue so responsible is PML N/or the federal govt
facts also show that biggest defaulters are provincial govts including punjab and azad kashmir and baluchistan(PML N had it for four years)

reality is cost of generation is one reason too, PML N slept for first 2 years than suddenly jumped on LNG wagaon in its last 2 years and did nothing in transmission

now who is responsible for gas debt of 150+ billion rupees?

just go and read the WSJ news on K electric...

Balochistan gov? N so called MNA's made their own party BAP. AJK isn't part of Pakistan. And PTI is in federal government and circular debt is increasing by day. PTI have done nothing apart from increasing prices. Reality is 75% of losses happen in discos where N had no control and neither government. It was job of provincial gov to curb theft in KP and Sindh. Because thats the job of provincial government. Now PTI isn't doing anything despite being in government in 3 out of 4 provinces. And even in Sindh they have 15 seats.

 

[Kompromat]

80% of Defense budget is salaries which goes back to the economy.

50% Defense equipment is being purchased from local industry which supports thousand of jobs, runs dozens of factories and is begining to turn into a profitable export driven industry.

The industrial, technologies spoils are also to be accounted for as thousand of young STEM graduates are being provided placements, jobs, expertise and a career path.

Well 3% of GDP is around 20% of the total revenue that Pakistan earns every year.
Add in another 1% for the cost of nuclear weapons that I believe is separate to defence budget.
Then there is 5% of GDP just for debt servicing.

Defence and debt servicing means less than half of the revenue that Pakistan earns can be spent on actual development activities like infrastructure, education, health etc.

 

[Lincoln]

The companies in loss must be privatised, I hope they don't repeat the mistakes, it's been seen in History during Bhutto and Zia Government.

 

[Sugarcane]

We have to increase the defense budget to ensure the safety and security of country. So, Instead of talking about %of GDP spent on defense, Doc and team should focus on plugging the leakages and increase tax base to double the Government revenues.

 

[UKBengali]

80% of Defense budget is salaries which goes back to the economy.

50% Defense equipment is being purchased from local industry which supports thousand of jobs, runs dozens of factories and is begining to turn into a profitable export driven industry.

The industrial, technologies spoils are also to be accounted for as thousand of young STEM graduates are being provided placements, jobs, expertise and a career path.

It is proven that each dollar spent in the civilian economy grows the economy much more than in defence, even in countries like France that make nearly everything they need at home.
I understand why Pakistan spends 4% of GDP on defence( including nuclear weapons) but with another 5% of GDP going on debt servicing, this leaves precious little for education, healthcare and social welfare.
Fundamentally Pakistan needs to increase the 15% of GDP it raises in revenue in order to be able to better fund
areas that are currently being neglected. BD has a similar problem as it only raises 10% of GDP in revenue, but is kind of like better off as it's GDP per capita is growing much faster than Pakistan.

 

[ziaulislam]

Balochistan gov? N so called MNA's made their own party BAP. AJK isn't part of Pakistan. And PTI is in federal government and circular debt is increasing by day. PTI have done nothing apart from increasing prices. Reality is 75% of losses happen in discos where N had no control and neither government. It was job of provincial gov to curb theft in KP and Sindh. Because thats the job of provincial government. Now PTI isn't doing anything despite being in government in 3 out of 4 provinces. And even in Sindh they have 15 seats.

I think PTI should print money ..it seems it worked for PML N

https://www.facebook.com/

 

[kris]

I Personally take this news with pinch of salt because it all depends on what go t wants to show..

Nuclear weapons etc
Research and development costs..
Ancillary systems costs.. ....
Intelligence agencies...

Let me put an example. Suppose a road is build for military purpose but constructed by Civic govt systems - whose account will this go into?

All governments bluff

 

[Pakistani Aircraft]

What percentage is it of the budget?