Not counting pension, defence receives just 6% hike

The NDA government has enhanced the allocation for defence to Rs 2.74 lakh crore, though the bulk of it would be used on salary and running expenses bill, leaving only Rs 86,000 crore to procure military hardware. Finance Minister Arun Jaitley on Wednesday said in the Lok Sabha that for defence expenditure, excluding pensions, he provided Rs 2,74,114 crores in the budget. This includes Rs 86,488 crore meant for defence modernisation.

Compared to the last fiscal’s budgetary estimate of about Rs 2,58,500 crore, the overall increase in the military budget is about 6%. Much to the disappointment of the military community, India’s defence budget stands at 1.62% of its gross domestic product – lower than both China and Pakistan. On GDP terms, India’s defence budget is on a decline since the 1962 war. Even the GDP base expanded manifold in the last five decades.

The allocation for purchasing military hardware has increased by about 10% this time. From last year’s budgetary estimate of Rs 78,586 crore, the capital outlay rose by almost Rs 7,900 crore to touch Rs 86,488 crore. Out of its last year’s allocation on modernisation, the defence ministry could not spend Rs 6,886 crore, which was returned to the exchequer, in the current fiscal.

A separate outlay of
Rs 5,091 crore has been set aside for defence modernisation as indicated by an official note circulated after the Budget presentation. Neither the defence minister’s speech nor the Budget documents reflect this figure. Bulk of the allocation on the capital expenditure would be used to fulfill India’s committed liabilities, leaving only a fraction for new purchase. The defence industry also welcomed the increased capital expenditure.

While India’s defence budget expanded over the years, the spending continues to fall short of expectations leaving the soldiers with outdated weapons and obsolete equipment ranging from fighter planes, submarines and helicopters to bullet proof jackets. The salary and pension bill, on the other hand, kept increasing. The same trend continues. Out of the total allocation, the defence ministry’s revenue budget corners the lion’s share of Rs 1,72,773 crore that would be used to pay salary and foot the establishment bills. Jaitley has separately earmarked Rs 85,740 crore for defence pension.

A welfare measure was also announced by Jaitley who proposed introduction of an online railway booking system for the soldiers and officers who don’t have to stand in the queues with railway warrants. A new central computerised pension disbursement system too would come up for the ex-servicemen.