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Modest hike in defence spending

India will spend 1.8 % of its Gross Domestic Product (GDP) on defence this fiscal, the Union Budget for 2011-12 revealed today. Rahul Singh reports.

business Updated: Mar 01, 2011 00:37 IST
Rahul Singh

India will spend 1.8 % of its Gross Domestic Product (GDP) on defence this fiscal, the Union Budget for 2011-12 revealed on Monday. Experts, however, said defence spending ought to have been around 3% of the GDP, seen in the backdrop of China’s rising military might.

Finance minister Pranab Mukherjee allocated a budget of Rs 1,64,415 crore (US$ 36.5 billion) to the armed forces, out of which Rs 69,199 crore has been set aside for buying new weapon systems and platforms.

The 11.5 % hike in defence spending over last year’s outlay of Rs 1,47,344 crore has been dubbed marginal by experts. The allocation includes a revenue expenditure of Rs 95,216 crore for meeting day to day expenses of the military.

China’s official defence budget for 2010 stands at $78 billion, but the Pentagon estimates its actual military spending to be upwards of $150 billion. The Communist neighbour is investing heavily in a range of capabilities including, strategic missiles, space based assets, anti ship ballistic missiles, fighter jets, aircraft carriers and submarines.

Strategic affairs expert Air Vice Marshal Kapil Kak (retd) said, “The hike is hardly adequate to meet the military’s rising responsibilities in view of the feverish pace of China’s military modernisation. India’s defence modernisation gathered steam only during the last three to four years. Much needs to be done to build offensive capabilities in the long term.”

Kak said the Central Finance Commission had recommended in 1999 that 4% of the GDP should be earmarked for defence. Several committees on defence have proposed that military spending should ideally be 3% of the GDP.

India’s defence spending averaged 1.59 % of the GDP from 1947 to 1962, when our army suffered a humiliating defeat at the hands of the Chinese.

India sustained a defence spending of 3.1 % of the GDP between 1963 and 1988.

Military expenditure has been oscillating around the 2% mark in recent years.

It had hit a low of 1.9 % in 2008-09. In a departure from past tradition, the defence ministry did not surrender modernisation funds made available to it last year. In fact, revised estimates show that the ministry sought an additional Rs 833 crore for buying weapon systems, over and above, the Rs 60,000 crore earmarked as capital expenditure last year.

Defence budget:

2008-09----- Rs 1,05, 600 crore
2009-10----- Rs 1,41,703 crore
2010-11----- Rs 1,47,344 crore
2011-12----- Rs 1,64,415 crore

Funds for modernisation:

2008-09----- Rs 48,007 crore
2009-10----- Rs 54,824 crore
2010-11----- Rs 60,000 crore
2011-12----- Rs 69,199 crore