In the union budget for the financial year 2018-19, Finance Minister Arun Jaitley allocated Rs 2,95,511.41 crore for defence. The defence budget is hiked by 7.81 % by the previous year’s budget. Out of the total outlay for defence only Rs 99,563.41 is allocated for capital expenditure which includes modernisation expenditure for the forces, whereas Rs 1,95,947.55 for revenue expenditure.
In addition to the defence budget Rs 1,08,853.30 is allocated for defence pensions.
This year’s defence budget is only 1.58% of the Gross Domestic Product (GDP), which is lower than last year’s allocation in terms of percentage. After the war against China in 1962 this is the lowest allocation to defence forces.
Despite the recommendation of defence panel that the defence budget for the financial year 2018 should be around 2.5% of the GDP to reduce the shortages of equipment and technology in our defence forces.
The other major highlight of the budget is that Jaitley in his budget speech said, ”We have opened private investment in defence production and liberalisng foreign direct investment. We have also taken measures to develop two defence industrial corridors in the country and industry friendly defence policy in 2018-19.”
This time around there was no surrender of capital expenditure to the government in 2017-18 unlike that of previous years.
Our forces need modernisation on the priority basis, but this budget seems far too less to fulfil the shortages of our forces.