Energy Sector - 2

[Naresh]

<b>agnivayu Ji :</b>

Thank you for your clarification.

I would feel that the USD 600 Million paid to Pakistan as Annual Transit dues should entail an additional expense of at least Four Times for the Indian Defence – India is four Times the Size of Pakistan – up to may be Seven Times, Indian Economy and Population also India’s Coast Line and the corresponding Air Space is Seven Times that of Pakistan, and as such this annual earning of USD 600 Million could cast a burden of USD 2.4 Billion to USD 4.2 Billion on the Indian Annual Defence Budget-Spending.

In respect of Pakistan’s annual Defence Budget-Spending I refer you to the Two Interviews by Dr. Ayesha Siddiqa to the Editor of Des Pardes :

<b>First Interview : A full General is worth Rs 500 million+</b>

<b>Second Interview : 'Nukes deterred Indo-Pak war'</b>


<b>Additional Reading : Pakistan military runs 55 firms</b>

I quote from Dr. Ayesha Siddiqa’s First Interview :

<b>irshadsalim28: What was the defense budget for the year 2001?

asidd66: 131 billion. If u add these numbers the budget would escalate to over Rs. 400 billion</b>

If the Pakistan Defence Budget for the Year 2001-1002 was Pak. Rs. 400 Billion then at a Conservative Annual Increase of 15% the Pakistani Annual Defence Budget for the Year 2005-2006 would amount to Pak. Rs. 700 Billion i.e. about USD 12 Billion – this is a realistic Figure.

The Actual Pakistani Defence Budget Allocation may be USD 4 Billion to which one must add the USD 8 Billion that the Pakistani Armed Forces Owned Commercial Enterprises make in terms of Annual Profits.

<b>Regarding Short Cut statement on C-SPAN that their defense budget as a % of GDP is declining :</b>

In 2002-2003 Pakistan’s GDP was about USD 68 Billion.

The Pakistanis then went in for “Re-Basing” their GDP on the latest values and so the Pakistan GDP for 2003-2004 became USD 95 Billion or so and the 2004-2005 GDP has increased to USD 110 Billion. I am sure that Pakistan’s GDP for the Year 2005-2006 will reach the Figure of USD 125 Billion.

This re-working of GDP has not increased any Tax Receipts of the Pakistani Government. All it has done is to bring in “New Sectors” (since the previous Calculation Base Date) into the GDP Calculations.

The advantage of this “Re-Working” is that in 2002-2003 Pakistan’s Internal Debt was USD 35 Billion also the External Debt was about USD 35 Billion – thus the Debt was over 100% of the GDP.

At that time the Official so Called Annual Defence Budget was USD 3.5 Billion or so i.e. over 5% of the GDP.

With the re-workings of the GDP Figures Pakistan’s Total Debt is now USD 70 Billion i.e. about 64% of the GDP – this helps especially as now the Foreign Debt is 32% of the GDP where as in 2002-2003 it was over 50%.

Similarly the Official so Called Annual Defence Budget in 2005-2006 is about USD 4 Billion or so i.e. about 3.6% of the GDP.

I hope you understand the “Hanky-Panky”.

This Hanky Panky has no real bearing as there is no Physical “Immediate” Increase. This increase has been over the full period from the previous “Valuation” Date.

As such Pakistan will still remain an International Beggar and keep begging for Arms from Uncle and Ummah, Economic Aid from the World etc. etc.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->