Defence budget up 11.6 per cent, as unused funds are carried over

New Delhi: A sum of Rs96,000 crore has been allocated for defence in the budget for 2007-08, up 11.6 per cent over the previous year. In real terms, the increase amounts to Rs10,000 crore, as the Services managed to utilize only Rs86,000 crore of the allotted Rs89,000 crore last year.

Of the total amount, Rs41,000 crore has been set aside for capital expenditure. This is up against last year's budgeted figure of Rs37,500 crore. Revised estimates for last year's capital spending put the figure at Rs34,500 crore. A sum of approximately Rs3,000 crore would accordingly have been surrendered on this account.

The Indian Air Force, followed by the Army, contributed the biggest chunk of surrendered funds. The fact that Air Force returned nearly Rs2,000 crore on account of non-spending on aircraft, would indicate that the money had been set aside for the acquisition of multi-role combat aircraft, a contract yet to be set into motion.

As for the Army, it returned nearly Rs1,800 crore. Though there was a modest increase in pay and allowances and pensions this year, the biggest expenditure went towards purchase of equipment. The Army overshot the budget in one area, spending Rs2,015 crore on the purchase of aircraft against the allotted Rs1,300 crore.

The capital outlay has shown an increase this year because of the purchase proposals for aircraft put in by the Navy and the Air Force. The Navy has been allocated Rs1,965 crore for the purchase of aircraft, as against Rs1,172 crore in last year's budget. Of the allotted amount last year the Navy managed to utilize only Rs450 crore, as it failed to finalise a contract for the supply of 8-10 long-range maritime patrol aircraft. It expects to seal the deal this year.

An amount of Rs10,200 crore has been set aside for the IAF to purchase aircraft, which would more or less match the figure of Rs9,000 crore that the service spent on similar expenses last year.