Massive debts, rising unemployment and inflation, and an ever-slumping GDP – neighbouring Pakistan’s economy is on a downhill stride. And the Imran Khan government’s first Budget presented on Tuesday only reinforced this fact.
India, on the other hand, is doing much better despite a slight dip in GDP growth.
With Pakistan’s economy going through a massive crisis, the Rs 6 trillion-budget had a whopping deficit of Rs 3.56 trillion.
Just one day before the Pakistan Tehreek-e-Insaf (PTI) government presented its Budget, it unveiled the Economic Survey 2018-19, which shows that the country’s GDP grew at only 3.3 per cent in the fiscal year 2018-19. This is a nine-year low. The neighbouring country is also struggling with issues such as unemployment and inflation.
On the other hand, India too witnessed a climb-down in GDP growth to 6.8 per cent during the fiscal year 2018-19 – a five year low. However, the Indian economy is still much bigger than arch-rival Pakistan. The size of Indian economy is $2,600 billion – almost nine times larger than Pakistan.
India Today’s Data Intelligence Unit (DIU) has compared the latest Union budgets of both countries to map their allocation and expenditure patterns.
The recent Budget of Pakistan shows that a massive 42 per cent goes only as interest payments for the debt-ridden country. Narendra Modi-led India, on the other hand, has its debt in check and spends only 18 per cent of the Budget to service this front.
As a result, India is able to spend more than 20 per cent of its Budget amount in government-sponsored schemes, thus resulting in overall economic welfare of the country. Nuclear Pakistan can spend only 10.3 per cent of its annual Budget for government-sponsored welfare schemes.
Apart from interest payments, the biggest budget allocation (17 per cent) in Pakistan goes to the defence sector. Interestingly, though India’s defence budget is six times larger than Pakistan, it accounts for only 8 per cent of its Budget expenditure.
Even in terms of fiscal deficit, Pakistan is faring a lot worse. Its fiscal deficit (percentage of GDP) is 7.2 per cent as compared 3.4 per cent back home.
The difference in economic parameters of the two countries becomes even more evident when it comes to forex reserves. India has forex reserves worth around $420 billion – 24 times larger than Pakistan’s forex reserves of around $17.4 billion.