Defence outlay jumps by 8.5 pc

Presenting the Budget in the Lok Sabha, Union Finance Minister Pranab Mukherjee earmarked Rs 164,415 crore for defence, out of which Rs 69,199 crore have been allocated for capital expenditure — a jump of 8.5 per cent compared to last year’s revised estimate of 60,833 crore.

“Our concerns have by and large been addressed. The finance minister has promised that should there be any fresh requirement, it would be met without any difficulties,” Defence Minister A K Antony said.

Close to 40 per cent in the capital allocation — approximately Rs 28,000 crore — would be spent on inking new agreements like acquisition of 126 medium multi-role combat aircraft, heavy-lift C-17 transport aircraft from the US and 145 ultra-light howitzer guns for the Army.

The remaining would be spent on “committed liability” like making payments for existing projects, including Russian aircraft carrier “Admiral Gorshkov”, stealth frigates and submarine.

The defence ministry gets a substantial hike in its capital budget because for the first time it was able to spend its allocated Rs 60,000 crore in 2010-11. In fact, the ministry received Rs 833 crore extra from the finance ministry for more acquisition even though the officials are tight lipped on its nature of this last minute buy.

But in the last 5 years, the ministry consistently returned a part of its capital allocation to the government exchequer due to its inability to spend. The ministry returned Rs 7,007 crore in 2008-09 and Rs 3,712 crore in 2009-10.

A turn-around happened in 2010-11 for two reasons — defence ministry changed the Army’s allocation for “committed liability” substantially making it possible for the Army to go for big-ticket acquisition, which would take a few years to realise and delivery of key platforms like C-13J transport planes and tankers for the Navy.

Even though a service-wise break up of the capital outlay for three services are not available, a back-of-the-envelop calculation shows that capital allocation for the Army and Indian Air Force has gone up substantially owing to two impending aircraft deal — 126 MMRCA contract expected around September and 197 helicopters for the Army to replace the ageing Cheeta and Chetak fleet.

The capital allocation for the Army under the head “air-craft and aero-engine” went up from Rs 148.87 crore in the last fiscal to Rs 2,291.6 crore in the current. The outlay for the IAF under the same budgetary head went up from Rs 19,952.7 crore to Rs 27,322.17 crore.

On the other hand, the capital outlay for the Navy and defence research and development organisation dipped marginally. However, if calculations are done taking the Budget on the expenditure side — used for salary, maintenance and fuel — into account that may represent a different picture.

Over 35 pc hike for Dept of Space

Budget for the country’s Space strides was hiked by little over one third of its last year’s allocation with the human space flight and Chandrayaan II cornering handsome amounts, PTI reports from New Delhi.

The Human Space Flight programme of the Isro was allocated Rs 98.81 crore as against the token amount of Rs 14.71 crore last year, while the sequel to India’s maiden moon mission got Rs 80 crore as against Rs 25 crore the previous year.