Budget 2026: Pakistan bets on Higher Defence Spending amid Security Challenges

ISLAMABAD – Pakistan announced federal budget of Rs18.77 trillion for the upcoming fiscal year in a major shift in spending priorities as the government increases defence allocation while restricting development expenditure and raising ambitious tax targets under IMF constraints. Finance Minister Muhammad Aurangzeb presented the budget in parliament, confirming that defence spending will rise to 3 trillion rupees, an increase of around 18% compared to the previous year. He said the higher allocation reflects the need to strengthen national security amid regional uncertainty. Pakistan is facing a lot of security challenges, as the country attempts to maintain what officials describe as a minimum credible deterrence across multiple fronts. Despite limited resources, this budget is stretched across a wide security spectrum—including territorial defence, counter-terrorism operations, and internal security management—leaving little room for expansion or modernization at scale. Unlike single-front defence model, Pakistan’s security challenges span more than one direction. Along its western border, the country continues to face militant activity, cross-border infiltration, and entrenched armed networks, while the eastern frontier remains a conventional security concern. This dual-pressure environment means defence spending is not concentrated on one type of threat but must simultaneously support border defence, counter-insurgency, and internal stability operations. The imbalance in regional military spending remains stark. Pakistan’s defence budget is estimated at roughly one-eighth of its primary regional adversary, underscoring what analysts describe as a structural capability gap rather than an active arms race escalation. In terms of equipment acquisition, the disparity is even more visible. Reports indicate that while India allocates around $21 billion for new defence systems and hardware, Pakistan has only about $2.34 billion available for new inductions, significant