Allocation For Defence In Budget

ASSIGNMENT ON

“Allocation for Defence in Budget”

Submitted by S.Mahendran 07MBA059 Defence- Budget: Finance Minister P.Chidabaram said that the defence allocation for the coming year would be Rs 1, 05,600 crore, a hike of ten per cent from last year's allocation of

Rs 96,000 crore. But in actual terms, the hike is 14.16 per cent as that of last year as the Defence Ministry could only spend Rs 92,500 crore, leaving a sum of Rs 3,500 crore unspent, apparently due to two major contracts for purchase of helicopters and 155 MM artillery guns not going through. Allocations: 

allocation on capital outlay running into Rs 48,007 crore.

 Of the total allocation, Rs. 480 billion has been earmarked for the purchase of Hardware.  Rs. 579 billion has been allocated for the three services and for R&D.  Of the three services, the 1.1 billion strong Indian Army will expectedly get the Lion’s share of Rs. 362 billion, followed by the Indian Air Force(Rs. 108 billion) and the Indian Navy(Rs. 74 billion). 

The

Defence

Research

and



Organisation has been allocated Rs. 33 billion. Rs. 155 billion earmarked for pensions and Rs. 440 million for 22 Sainik Schools.

Development

The Finance minister also added, “I have assured the Defence minister that more money would also be provided if necessary, especially for capital expenditure.” Problem Remains: Though there was substantial hike in defence budget, India's defence spending continued to be below two per cent of the GDP far less as compared to Pakistan's 5 per cent and China's almost 7 per cent. It is for the first time in at least a decade due to fiscal pressures and larger outlays for farm, health and education sectors. View of Defence Minister: “I’m happy. You have heard the Finance Minister say on the floor of the house that more money would be provided,

if

required,

particularly

for

capital

expenditure…. This will drive the modernization drive of the Forces” said Defence Minister, A.K.Antony.