However, pensions paid to retired military personnel are not part of expenditure on Defence. Pensions to retired uniformed persons are more than three times the pension paid to civilian retirees. Disbursement on pensions was Rs 167.4 billion in 2012-13 and is shown Rs 171.3 billion for next year. This does not take into account the 10 percent rise approved by the Federal Cabinet and announced by the Finance Minister Ishaq Dar in his speech last Wednesday. If indeed 10 percent rise is to be given to pensioners and their widows the expense will go up further. Last year the budgeted amount was Rs 167.4 billion on account of pensions of which a hefty sum of Rs 131.5 billion went to military and Rs 35.9 billion to civilians. In the next financial year (2013-14), expenditure rises further to Rs 171.3 billion of which Rs 132.7 billion is to be disbursed to military pensioners while Rs 38.6 billion to civilians, according to budgetary papers.
Military pensions traditionally formed part of Defence expenditure. The then banker-turned Finance Minister Shaukat Aziz decided to separate it to show lower expenditure on defence because India had done so a year before.
If the pension figure is added to expenditure on Defence Affairs only then a proper picture emerges. Defence expenditure will go up from Rs 601.9 billion in 2012-13 to Rs 759.9 billion in 2013-14. This is 26.89 percent of current expenditure and three percent of GDP.