Army First, Public Later? Pakistan Budget Delayed Over GHQ’s Defence Hike Demand | Exclusive

Last Updated:June 03, 2026, 15:18 IST

The budget delay has exposed Pakistan’s civil-military imbalance, with GHQ seeking a 20–25 per cent defence hike despite IMF pressure for tighter spending.

Pakistan has delayed the announcement of its federal budget amid a widening dispute over defence spending, provincial funding and International Monetary Fund-linked fiscal targets, top sources have told CNN-News18.

The budget, earlier tentatively expected around June 5, is now likely to be announced next week after the Shehbaz Sharif government failed to resolve disagreements over expenditure allocations, including a proposed sharp increase in defence spending.

According to top government sources, Pakistan’s General Headquarters (GHQ) has sought at least a 20–25 per cent increase in defence expenditure at a time when the country is facing severe economic stress. The demand has triggered friction between the federal government, provinces and the IMF, which has reportedly resisted such a steep and abrupt rise in military spending.

Sources said the IMF wants Pakistan to present a more public-friendly budget and is not in favour of heavy additional spending for defence purposes. The Pakistan finance ministry is learnt to have sought the IMF’s consent this week for adjustments in major expenditure heads, just days before the tentative budget date.

Rs 1.7 Trillion Fiscal Space Sought From Provinces

Top sources said the Sharif government is exploring ways to create additional fiscal space of around Rs 1.7 trillion Pakistani rupees from the provinces to meet fresh targets and fully fund defence and military operations.

The finance ministry is now working on possible additional cuts from provincial shares. Sources said the federal government may need legislation before the Finance Bill 2026–27 if it decides to seek additional funding from provinces.

The government is also considering adjustments to the National Finance Commission Award in order to transfer certain expenditures to Punjab and Sindh. However, the Pakistan People’s Party is opposing changes to the NFC Award, sources said.

NEC Meeting Postponed Amid Disputes

The National Economic Council meeting has also been postponed amid unresolved disputes over the Public Sector Development Programme, the Benazir Income Support Programme and power subsidies.

Sources said revisions in development and social spending have halted the NEC process as the federal government looks for ways to meet new defence demands while staying within IMF-linked fiscal limits.

GHQ Dominating Civilian Government

Top Indian intelligence sources said the budget delay has exposed the extent to which Pakistan’s military establishment continues to dominate the civilian government’s fiscal decision-making.

According to these sources, the Pakistan Army’s demand for a 20–25 per cent defence hike, despite the country’s economic crisis, has put the Shehbaz Sharif government under intense pressure.

Sources said the situation shows how GHQ’s demands are prevailing over the civilian government at a time when Pakistan is struggling to balance IMF conditions, coalition pressures and public welfare commitments.

They added that the proposed increase in military spending could further squeeze public expenditure, including development and social-sector allocations.

Budget Delayed

With the federal government seeking additional fiscal space from provinces and coalition partners opposing changes to revenue-sharing arrangements, the budget process has entered a political and fiscal deadlock.

For now, the Shehbaz Sharif government is caught between GHQ’s demand for higher defence allocations, IMF pressure for fiscal discipline, and provincial resistance to any reduction in their financial share.

About the Author

Manoj Gupta

Group Editor, Investigations & Security Affairs, Network18

News world Army First, Public Later? Pakistan Budget Delayed Over GHQ’s Defence Hike Demand | Exclusive

Read More