Marginal hike in defence outlay

Ministry gets Rs 5,641 crore this budget, pushing the overall amount to Rs 147,344 crore

Even though the overall increase in military budget is meagre four per cent, the hike in the allocation of capital expenditure would allow the Defence Ministry to buy new hardware for the services, if price negotiations concludes in time.

The 4 per cent hike amounts to an overall increase of only Rs 5,641 crore.

Additional requirement

“Needless to say, any additional requirement for the security of the nation will be provided for,” Union Finance Minister Pranab Mukherjee said in the Lok Sabha while presenting the Budget on Friday.

For the last two financial years, the Defence Ministry returned Rs 7,000 crore from its capital budget, meant for acquisitions. In 2009-10, the Centre allocated Rs 54,824 crore for purchase but the ministry could spent only Rs 47,824 crore.

This year, the monetary return to state exchequer could have been more had New Delhi been unable to finalise a fresh deal to buy 29 MiG-29K from Russia, the agreement for which is likely to be signed during the upcoming visit of Russian Prime Minister Vladimir Putin.

The defence budget stands at 2.5 per cent of GDP despite suggestions from some think tanks to increase the allocation because of the subcontinent’s volatile security scenario.
Continuing with the modernisation trend, the government has hiked the capital outlay for all the three services.

Biggest gainer

The biggest gainer is the Indian Air Force that has been allocated Rs 15,205 crore to purchase aircraft and aero-engines, which may include finalising a fresh deal to buy 50 additional Su-30 MKI fighters and zeroing on an imported engine for LCA Navy.

Capital allocation for the naval fleet has been augmented from Rs 5,901 crore to Rs 6,950 crore indicating possible purchase of new battleships from Russia.

The Army, too, has an enhanced budget in this category — from Rs 355 crore in the last fiscal to Rs 637 crore this year — which may be an indicator of sealing a deal to buy helicopters as a replacement of ageing Cheetah and Chetaks.

In what may reflect the fluid border situation, the allocation for “special projects” has been more than doubled from Rs 138.84 crore in 2009-10 to Rs 297.04 crore in 2010-11.
Though there have never been any official word on the nature of “special projects”, it is believed that they are indicative of the intensification of spying and reconnaissance activities.