Friday, March 1, 2002, Chandigarh, India


M A I N   N E W S

14 pc hike for Defence
Tribune News Service

New Delhi, February 28
The government today chose to concentrate on the country’s security concerns by bringing about a substantial hike of 14.03 per cent in its allocation for Defence over last year’s revised estimates in the annual Budget presented by the Finance Minister, Mr Yashwant Sinha, here today.

Keeping in view the prevailing security scenario in the Indian sub-continent, Mr Yashwant Sinha allocated Rs 65,000 crore for the year 2002-03, almost Rs 8,000 crore more over the last year’s revised estimate of Rs 57,000 crore, which is among the highest in the recent years.

However, in real terms the hike in the Budget for Defence can be considered just about 4.8 per cent over the last year’s allocation. It is just about Rs 3000 crore over the last year’s allocation of Rs 62,000 crore.

The Ministry of Defence chose to return Rs 5000 crore of the amount allocated last year as it was unable to spend it, mainly due to the cautious approach adopted in purchases following the Tehelka scam. Even till lately, a major amount of the allocation remained unspent due to the cautious approach. However, the recent troop movement and the purchases made for them led to some expenditure.

Incidentally, even last year, the Defence Ministry had chosen to return Rs 4126 crore of the amount allocated in the Budget for the year 2000-2001.

Although the hike in the allocation was nowhere near the all-time high of 30 per cent in 2000-2001, which was more as a result of the limited war which India fought with Pakistan in Kargil in 1999, the 14.03 per cent increase was more than that the country has seen in the recent years. Last year, the hike had been 13.84 per cent. It gave clear indications that the government’s stress was again on the modernisation of the Armed Forces, specially as there has been in the increase in the allocation has been for acquisition of equipment by the three services. The Armed Forces have been demanding acquisition of more equipment to fill the gaps in the country’s defence structure.

The Finance Minister in his speech declared that modernisation and upgradation of the country’s defence preparedness was the area of “highest national priority”. He added that in case there was need for more he would not hesitate to provide for funds.

To meet the whopping costs of operations of the armed forces, specially those deployed along the border with Pakistan, the Finance Minister also imposed an across the board 5 per cent surcharge on all categories of tax payers. He pointed out that the national security was an “overriding concern” and its costs should be shared by “all of us”. The budgetary allocation this year amounts to about 3.1 per cent of the GDP which is among the highest in the recent years. It is much more than the 2.6 per cent allocated last year. It is in line with the approach adopted by the government in 2000-2001 Budget when the allocation was about 2.5 per cent of the GDP.

The Defence allocation this year also shows the government’s determination to carry on with improving country’s defence but keep up the pressure on Pakistan. The government has clearly made a provision in the allocation for the expenditure on the troops deployed along the borders.

It has, in fact, gone ahead of the allocation that the government made after the Kargil conflict, indicating that it was in no mood to pull back the forces in a hurry. Incidentally, 2000-2001 was the first time in over a decade that the defence allocation touched the level of 2.5 per cent of the GDP after a steady decline over the years. In 1999 the allocation was just about 2.33 per cent of the GDP.

The major increase in outlay has been for acquisition of aircraft and aero-engines besides other equipment, including that for the surveillance along the borders. The government has decided to allocate Rs 6929.91 crore for aircraft and aeroengines which is almost Rs 2420.36 crore more than the revised estimates.

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