Defence budget crosses 3 lakh crore for first time

Ajay Banerjee
Tribune News Service
New Delhi, February 1

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India, in an attempt to match its growing military profile, allocated Rs 3,18,931 crore ($44.74 billion) to the Ministry of Defence even as salaries and establishment expenses and pensions continue to add a burden on the resources.

The allocation will include Rs 1,08,248 crore as capital expenses meant for new equipment, weapons, aircraft, naval warships, Army vehicles. The MoD will spend around 32 per cent of the total Central Government capital expenditure. The spending is way behind China, which spends $224 billion annually, as per estimates by US think-tank Centre for Strategic and International Studies (CSlS). Beijing finalises its budget in March every year. Interim Finance Minister Piyush Goyal gave 6.87 per cent hike — or Rs 23,420 crore — over the military spending of Rs 2,95,511 crore allocated for the ongoing fiscal.

Separately, a sum of Rs 1,12,080 crore has been allocated for defence pensions. The combined budget — for operations, salaries, pensions and capital — stands at Rs 4,31,011 crore, which constitutes 15.5 per cent of the government’s spending.

The services are literally weighed down by bulging “establishment” costs —euphuism for salaries and pensions. The salaries of the three services and the civilians work out to be Rs 1,19,559 crore and now form 37 per cent of the Budget. In other words, salaries and pensions take up more money than what is allocated for modernisation. The MoD is looking at “right-sizing” the forces and also look at cutting costs from within. The Army has started its restructuring process.