Defence budget too low for big-ticket military modernisation
03 February 2020
Finance minister Nirmala Sitaraman has given little leeway for defence planners for big-budget acquisition with a modest 1.8 per cent hike in defence outlay for the 2020-21 fiscal, a decision that would adversely affect plans for modernisation of the Army, Navy and the Air Force.
The total amount of Rs3,37,000 crore allocated this year does not include pensions and is 5.6 per cent more than last year’s initial of Rs3,18,000 crore, which leaves little scope for a leap as far as modernisation of armed forces is concerned.
However, the 2019-20 defence budget was revised as the ministry sought more funds from the government. As per the revised budget for 2019-2020, the total allocation to the ministry comes to Rs3,31,000 crore.
The capital outlay allocation for the three forces is a mere Rs1,13,000 crore, while in the last budget the revised expenditure came to Rs1,10,000 crore.
The allocation under capital expenditure meant to procure big-ticket weapons, fighter jets, submarines, helicopters and other modern military systems does not match requirements for critical purchases.
A chunk of the overall budget for the ministry of defence will meet demands of salaries and an additional 1.33 lakh crore is allocated separately for paying pensions.
The Union Budget for the financial year 2020-21 envisages a total outlay of Rs30,42,230 crore. Out of this, Rs3,37,553 crore has been allocated for defence (excluding pension). For defence pension, an amount of Rs1,33,825 crore has been provided in Budget Estimates 2020-21. There is an increase of Rs40,367.21 crore in the total defence allocations (Rs4,71,378 crore) including defence pension over the financial year 2019-20.
Total defence budget accounts for 15.49 per cent of the total central government expenditure for the year 2020-21.
The allocation of Rs4,71,378 crore represents a growth of 9.37 per cent over Budget Estimates (Rs4,31,010.79 crore) for the financial year 2019-20.
Out of Rs3,37,553 crore allocated for the financial year 2020-21, Rs2,18,998 crore is for the revenue (net) expenditure and Rs1,18,555 crore is for capital expenditure for the three services and the organisations/departments under the ministry of defence. The amount of Rs1,18,555 crore allocated for capital expenditure includes modernisation related expenditure.