Pakistan unveiled a deficit national budget on Saturday, proposing an increase in defence expenditure to help fight Taliban militants while boosting agriculture and industrial output and reducing poverty. The budget for fiscal 2009-2010 starting from July 1 comes amid increasing suicide attacks and other militant violence in the major towns and cities of the nuclear-armed South Asian country.

“We now face the prospect of incurring huge costs on account of counter-insurgency expenditures,” state minister for finance Hina Rabbani Khar told parliament as she introduced the 35.85 billion dollar budget. She said the government had fixed the defence budget at 343 billion rupees (4.24 billion dollars), an increase of 47 billion rupees (581 million dollars) for the next fiscal year. She said that the government had a big challenge to deal with as millions were left homeless due to military operations against the Taliban.

Pakistan has also increased the salaries of soldiers fighting militants in three northwestern districts and along the rugged border with Afghanistan from July 1, and rest of the troops would get increased salaries from January 2010, she said.