The Federal Government has announced a huge budget cut for the Armed Forces Development Programme (AFDP) in order to meet a major condition of the International Monetary Fund (IMF) to revive its loan programme.
According to the details, the Government has slashed budget the Armed Forces Development Programme (AFDP) by Rs. 72 billion or one-fifth of the allocation so it can achieve a primary budget surplus in the new fiscal year, which is one of the demands put forth by the IMF in order to restore the bailout programme.
One of the core conditions for the revival of the IMF bailout package is having a primary budget surplus of Rs. 153 billion or 0.2 percent of the national output and Finance Minister Miftah Ismail hopes that a staff-level deal will be made with the IMF before the end of this week.
According to the details, the Government had allocated a budget of Rs. 363 billion for the Armed Forces Development Programme in the Finance Bill 2022-23 tabled in the National Assembly on June 10. However, the budget has been reduced to Rs. 291 billion in the revised Finance Bill made public after its approval from the National Assembly.
The Armed Forces Development Budget (AFDP) has been cut by Rs. 72 billion or 20% on IMF’s demand to restore the bailout package, which is needed to revive the economy. However, it is pertinent to mention that AFDP is allocated separately from the regular Defence Budget.