India's defence budget for the first time exceeds Rs 3 lakh crore, but the allocation is still insufficient for the armed forces to carry out their planned modernisation drive in full vigour.
The budgetary allocation for defence is about Rs 3.18 lakh crore, which is 6.46% more from last year's revised estimate of Rs 2.98 lakh crore. Compared to the previous fiscal's budgetary estimate of Rs 2.95 lakh crore, the enhancement is 7.34%.
“Our defence Budget will be crossing Rs 3,00,000 crore for the first time in 2019-20. For securing our borders and to maintain preparedness of the highest order, if necessary, additional funds would be provided,” Finance Minister Piyush Goyal said in the Lok Sabha.
However, in terms of GDP, the allocation on defence is one of the lowest in the history (1.45%) that goes contrary to the military's persisted demand of a sizeable rise in the allocation to improve the infrastructure and purchase new arms and ammunition to take on the enemy.
The marginal increase from last year's allocation is grossly inadequate to buy new howitzers, aircraft and warships, which the military need.
“Budget allocation for defence has fallen to an all-time lowest ever in India's history. Considering the rate of inflation and foreign exchange rates, it is not possible to keep the armed forces at the same level, leave alone modernise the military. This is the Modi govt’s legacy,” tweeted CPM leader Sitaram Yechury reacting to the defence budget.
The only saving grace is Rs 9,400 crore increase in the capital outlay after almost two years when the modernisation was almost capped at around Rs 90,000 crore. The bulk of the money, however, is spent on “committed liabilities” leaving little for a new purchase.
For the defence ministry, the major outgo is the revenue budget of Rs 1.98 lakh crore, nearly 60% of which is spent on pay and pension. The rest is spent on buying ammunition, fuel and for the civil works.
If one takes into account the whopping defence pension bill after the implementation of the one-rank-one-pension scheme, the total budget allocated for the Ministry of Defence goes past Rs 4 lakh crore (Rs 4.31 lakh crore to be exact) as nearly Rs 1.12 lakh crore has been earmarked to distribute enhanced pensions.
But it remains a matter of worry for the armed forces as the bulk of the defence budget goes for the revenue expenditure.