In the midst of a major modernization drive, the Defence Ministry on Thursday got a 14 per cent hike in its budget as Finance Minister P Chidambaram gave it Rs 2,03,672 crore (($37.45 billion–Ed) for 2013-14 with a promise to provide any additional fund required for national security.
Thursday’s allocation is up by Rs 25,169 crore from 2012’s revisited estimate of Rs 1,78,503 crore. The budget estimate was Rs 1,93,407 crore but Rs 14,904 crore was slashed by the Finance Ministry owing to the strain on the economy.
“I propose to increase the allocation for defence to Rs 2,03,672 crore. This will include Rs 86,741 crore ($16 billion—Ed) for capital expenditure,” Chidambaram said. “The Defence Minister has been most understanding and I assure him and the House that constraints will not come in way of providing any additional requirement for the security of the nation,” he said.
The Defence Ministry is in a major modernisation process with several acquisitions in the pipeline besides upgradation of infrastructure in the northeast along with China border. Among the major acquisitions in the offing are the 126 multirole combat aircraft, 22 Apache attack choppers and 15 heavy-lift choppers.
The capital expenditure was hiked from Rs 69,579 crore in 2012 to Rs 86,741 crore. Defence Minister AK Antony was satisfied with the allocation. “Factoring the current economic scenario, he (Chidambaram) has been fair to the Defence sector also by increasing the budget and giving an assurance that should there be any urgent need in future the same would be provided,” Antony said.
“Taking into account the difficult economic situation both at home and abroad, the Finance Minister has done a good job. The measures that he has outlined for the rejuvenation of the economy while ensuring inclusive growth are indeed commendable,” Antony said.
The Defence Ministry had in 2012 demanded for Rs 40,000 crore more for meeting its modernisation requirements in addition to the Rs 1,93,407 crore but that could not be provided. Rs 14,904 crore were cut from its budget allocation. Of this cut, Rs 10,000 crore were from the capital expenditure and the remaining was from revenue expenditure.
Of the total expenditure of the government of India, defence expenditure would account for ten per cent which is one per cent less than 2012-13. In 2011-12, the government had allocated Rs 1,64,415 crore for the defence ministry and later, it was revised to Rs 1,70,937 crore. Increasing the allocation by 13 per cent, the government gave Rs 1,93,407 crore to the ministry for 2012-13. The allocation in 2012 was less than two per cent of the GDP of the country.
