Wages, pensions eat into defence spending
Ajay Banerjee
Tribune News Service
New Delhi, July 5
Weighed down by salaries and pensions, the defence budget announced today remains the same as the one announced on February 1. The allocation is 7.93 per cent higher than the Budget estimates of the last fiscal.
The budget for this fiscal will be Rs 3,18,931.22 cr ($44.74 billion), the same amount set aside in the interim budget in February, and 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 budget for the last fiscal was Rs 2,95,511 crore and the hike is Rs 23,420 crore this fiscal.
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 Rs 1,19,620 crore and now form 37.51 per cent of the budget. In other words, salaries and pensions take up more money than what is allocated for modernisation.
Finance Minister Nirmala Sitharaman, who served as the Minister for Defence in the previous government, allowed exemption of basic customs duty on import of defence equipment not manufactured in India.
"This will have an impact of augmenting the defence budget by approximately Rs 25,000 crore on account of savings in expenditure on customs duty over the next five years," the Ministry of Defence said tonight.
The budget has an allocation of Rs 1,08,248 crore as capital expenses meant for new equipment, weapons, aircraft, naval warships, Army vehicles. The MoD will spend around 31.7 per cent of the total Central Government capital expenditure.
The spending is way behind that of China. Data released by Swedish think-tank Stockholm International Peace Research Institute (SIPRI) on April 29 titled "Trends in World Military Expenditure, 2018" says: "China, the world's second-largest (behind US) military spender, allocated $250 billion to the military in 2018, which accounted for 14 per cent of all global spending."
