Defence sector gets paltry hike

The defence allocation in the Budget has increased marginally as a result of which India’s military spending would continue to be much lower than China and Pakistan.

The total allocation for the defence sector has been pegged at Rs 2,46,727 crore, which is 7.74 per cent higher than the budgetary allocation of last fiscal. Compared with the likely expenditure of the current fiscal, the jump is just under 11 per cent.

There is no increase in the capital outlay for the defence, which has been fixed at
Rs 94,588 crore – exactly the same as the capital outlay in the last fiscal's budgetary estimate.

Last December, the government slashed Rs 12,623 crore from the capital outlay, adversely impacting the modernisation programme of the armed forces. As a result, the capital budget for defence – meant for arms purchase – would end up as Rs 81,965 crore in this fiscal.

As a percentage of Gross

Domestic Product, India’s Defence Budget continues to be around 1.75 per cent of the GDP – not only lower than China and Pakistan but also lesser than Sri Lanka.

The Stockholm International Peace Research Institute (SIPRI) estimates suggests, China’s defence expenditure is about two per cent of GDP for each year between 2011 and 2013. For Pakistan, it was 2.9 per cent of GDP in 2011 and 3 per cent in the next two years.
Even Sri Lanka spent 3 per cent of its GDP on defence in 2011 whereas the expenditure came down to 2.6 per cent in 2012 and 2.8 per cent in 2013
for the island

nation, according to the SIPRI estimate, which Defence Minister Manohar Parrikar shared with Parliament two months ago.

Much to the disappointment of the veterans, Jaitley did not say anything on the one-rank-one-pension(OROP), negating Parrikar’s claims that the issues would be addressed in the Budget. The principle of OROP for the armed forces has been accepted by the government.

“The methodology of OROP is pending between the finance and defence ministries,” the finance minister said in his post-Budget media interaction.

Retired personnel’s issues

Under the OROP, retired service personnel were demanding same pension for individuals retiring on the same rank and having the same length of service. At the moment, there is a difference in pension amount between those who retired before January 1, 2006 and after that date.

In its interim Budget in February 2014, the UPA government allocated an additional Rs 500 crore to the Defence Ministry to bridge the gaps in some of the ranks. But still, there are ranks where the gap exists in post-retirement benefits. In July 2014, Jaitley stated Rs 1,000 crore was earmarked for the same.