DEFENCE: Defence budget up 23 per cent; Rs 7,007 crore returned unutilised.
The allocation for defence in the Interim Budget 2009-10 has been scaled up to Rs 1,41,703 crore, an increase of 23 per cent over the Rs 1,14,600 crore allocated in 2008-09 (revised estimates).
The armed forces have returned, unutilised, Rs 7,007 crore from the capital outlay in 2008-09. As a result, the total capital outlay on defence services during the year is expected to be Rs 41,000 crore, about 15 per cent below the Budget estimate of Rs 48,007 crore. An analysis of the numbers suggests that all three wings of the armed forces — Army, Navy and Air Force — have gone slow on capital expenditure during 2008-09.
In this year’s Budget, Rs 54,824 crore has been allocated for capital expenditure, a 33 per cent increase over the previous year’s allocation.
Finance Minister Pranab Mukherjee said the deteriorating security situation in the country due to cross-border terrorism, especially in the wake of the Mumbai terror attacks in November 2008, played a key role in the decision to increase the allocation. “The allocation would be increased for any additional requirement for the security of the nation,” he said.
The initial allocation for defence for 2008-2009 was Rs 1,05,600 crore. This has now been revised to Rs 1,14,600 crore, an increase of Rs 9,000 crore, or 8.52 per cent. This has resulted from the 27.78 per cent rise in revenue expenditure from Rs 57,593 crore to Rs 73,600 crore on account of pay and allowances.
For 2009-2010, Rs 86,879 crore has been allocated for revenue expenditure, an increase of Rs 13,279 crore, or 18 per cent, over the previous year’s revised estimates.
Referring to the Mumbai terror attacks in his speech, Mukherjee said: “We are going through tough times. The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism. A threshold has been crossed. Our security environment has deteriorated considerably.”
On numerous occasions, Mukherjee, along with other Cabinet ministers such as Defence Minister AK Antony, has said that modernisation of the armed forces will not be compromised due to the global financial slowdown.
However, even after the 23 per cent increase in this year’s defence Budget, India’s defence spending is about 2 per cent of its gross domestic product, way below China’s 7 per cent and Pakistan’s 5 per cent.
