At Rs.246,727 crore, India's defence spend hiked 7 percent

New Delhi: At Rs.246,727 crore ($40 billion), India's defence spend was Saturday hiked a modest 7.74 percent, with Finance Minister Arun Jaitley declaring that “defence of every inch of our land is above everything else”.

Presenting the budget for 2015-16 in the Lok Sabha, Jaitley said the government was following a policy of transparency and quick decision-making in procurement to keep the defence forces prepared for any eventuality.

He said the government was pushing for Make in India policy in defence manufacturing to reduce dependence on imports.

The allocation, which is a mere Rs.17,727 crore over the Rs.229,000 crore Jaitley had provided in his maiden budget last July, accounts for 13.88 percent of the total government expenditure for 2015-16.

“The growth of the defence budget has been in spite of lower divisible pool in view of the 10 percent increase in state allocation (under the 14th Finance Commission,” Defence Minister Manohar Parrikar said in a statement.

As usual, the 13-lakh-strong Indian Army has received Rs.1,04,158 crore -- a hike of Rs.5,846 from the revised estimate of Rs.98,310 crore in 2014-15.

At Rs.23,000 crore, the Indian Air Force allocation is Rs.2,815 crore higher than that of the previous fiscal, while the Indian Navy, at Rs.15,525 crore, has seen a small rise of Rs.1,590 crore.

The capital outlay for the year has been kept at the Rs.94,588 that had been originally allocated for 20144-15 but was reduced to Rs.81,965 crore in the revised estimates.

“What is worrisome is that the allocation as a percentage of the GDP has been steadily going down. This time, it is 1.74 percent of the GDP against 1.75 percent last year and 1.8 percent a year before that,” security expert C. Uday Bhaskar, director of the Centre for Policy Studies, told IANS.

A.K. Antony, the long-serving defence minister in the previous UPA governments, had often been pleading for defence allocation at three percent of the GDP.

“This is not a good sign and means that Parrikar has not been able to do much. We were hoping for a minister who would bite the bullet. Unfortunately, that hasn't happened,” he added.

“There is a very very deep structural flaw in the system. We have to decide what India needs and how we should spend the money. Whether it is the gun or tha man behind the gun, nothing seems to matter (for the government,” Bhaskar maintained.

As for the War Memorial and War Museum, for which Jaitley, then also the defence minister, had allocated Rs.100 crore in his previous budget, a separate implementation document circulated along with the budget paper, said the draft cabinet note for this was “under preparation”.

There has also been little progress in implementing the one-rank-one-pay scheme, for which an additional Rs.1,000 crore had been allocated in the last budget, with the implementation report saying: “The modalities are under consideration.”

“The fact that there has been no allocation on this count is going to send all the wrong signals,” Bhaskar said.

As for the Technology Development Fund that was meant to provide resources to public and private sector companies, including SMEs, as well as academic and scientific institutes to support R&D of defence systems that enhance the country's cutting-edge technology.

“Consultations with stakeholders have been completed and draft cabinet note is being prepared,” the implementation note said.