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Union Budget 2018: Defence spending increased by 7.81%, but lower than expectations

Out of total allocation of Rs 2,95,511 crore for defence budget, only Rs 99,947 crore has been set aside for capital outlay to purchase of new weapons, aircraft, warships and other military hardware.

india Updated: Feb 02, 2018 00:24 IST
Rahul Singh
Rahul Singh
New Delhi, Hindustan Times
Budget 2018,Union Budget 2018,Arun Jaitley speech
Indian Air Force tableau on display during the 69th Republic Day Parade in New Delhi on January 26, 2018.(PTI)

India on Thursday allocated Rs2.95 lakh crore for military spending during 2018-19, a modest hike of 7.8% over last year’s budget of Rs2.74 lakh crore. The budget includes a capital outlay of Rs99,563 crore for buying new weapons and systems, up from Rs86,488 crore.

The budget has breached the Rs4 lakh crore-mark if defence pensions (Rs1.08 lakh crore) are factored in. The pension outlay exceeds capital expenditure.

In a departure from a trend of surrendering unspent money, the defence ministry was able to utilise the entire capital outlay in the budget for 2017-18. Last February, the ministry surrendered Rs6,886 crore.

Finance minister Arun Jaitley said the NDA government had laid emphasis on modernising and enhancing the military’s operational capabilities.“Ensuring adequate budgetary support will be our priority,” he said.

Calling it a reasoned out budget, defence minister Nirmala Sitharaman thanked Jaitley for the “financial accommodation” and said the military would “prioritise” its modernisation projects. However, India’s defence spending continues to be on the decline measured against its gross domestic product (GDP). This year it has slipped to a mere 1.57% of the GDP.

First Published: Feb 01, 2018 17:49 IST