Defence budget slips below 2 per cent of GDP for the first time since 1962

For the first time since the India-China conflict of 1962 the country's defence budget has fallen below two per cent of the gross domestic product (GDP). According to Indian Army chief, General Deepak Kapoor, in spite of the country's defence budget going up ten per cent over the previous year, inflation at 11 per cent has negated the gain.

"Though defence budget for 2008-09 is 10 per cent more than previous year's allocation, we can very well gauge what impact inflation hovering at 11 per cent could have on defence planning," Kapoor said, addressing the Institute of Defence Studies and Analyses (IDSA) members here.

"There has been a persistent decline over the years from 3.38 per cent of GDP in 1987-88 to 1.98 per cent today - much below the global average," the Army chief said.

Like any other developing nation, Gen Kapoor said, the nation has to balance budgetary needs for security and development. In order to develop desired force capabilities, Gen Kapoor said, the military planner need to simultaneously balance induction of state-of-the-art weapons and equipment with other concerns of the armed forces and the nation.