The Ministry of Defence (MoD) has once again failed to fully utilise the funds made available to it for modernisation last year. Yet, it has got a higher allocation in the Interim Budget presented in Parliament on Monday, thanks to the deteriorating security environment highlighted by the 26/11 Mumbai terror strikes.
Sticking to the trend of surrendering funds, the MoD has been unable to spend over Rs 7,007 crore out of the total capital outlay of Rs 48,007 crore last year.
The armed forces have been allocated a sum Rs 54,824 crore for 2009-10 to sharpen their war-waging capabilities in the interim budget. The MoD has been allocated a total outlay of Rs 1,41,703 crore compared to Rs 1,14,600 crore for 2008-09, a clear jump of over 23.65 per cent and 2.35 per cent of the GDP. Last year’s defence budget stood at 1.9 per cent of the GDP.
“The Mumbai attacks have given a new dimension to cross-border terrorism. Our security environment has deteriorated considerably. In this context, I propose to increase the allocation…” said Mukherjee.
The interim allocation includes a revenue expenditure of Rs 86,879 crore for meeting the day-to-day expenses of the armed forces. Revised estimates show that the MoD spent Rs 16,007 crore over the sum earmarked for revenue expenditure in 2008-09.
The interim revenue expenditure accounts for almost 62 per cent of the total budget, much of which will be gobbled up by higher salaries on account of the Sixth Pay Commision and implementation of the A.V. Singh committee report that has kicked officers up the rank ladder.
The interim budget for the next fiscal underlines a yawning gap between revenue and capital expenditures. The ministry and the armed forces are striving to keep revenue expenditure under check and make sure that the split is in a 50:50 ratio. The share of revenue expenditure worked out to around 55 per cent last year.