The Defence Budget on Friday saw almost no hike for 2019-20 as the allocations were nearly the same as provided in the interim Budget on February one this year.
Presenting her maiden Budget, Finance Minister Nirmala Sitharaman’s speech also found no mention of the Defence outlay for ongoing fiscal. She, however, announced that basic customs duty on Defence equipment will not be levied.
The overall Defence Budget crossed the three Rs 3 crore mark in the interim Budget but in real terms the hike was a modest seven per cent as compared to 2018-2019. The outlay announced provided for by Sitharaman is also nearly same with the capital outlay of Rs 1,03,394 crore. This figure stood at Rs 93,982 crore in the last fiscal. The total budgetary provisions for the current fiscal now is Rs 3,05,296.07 crore. These figures exclude miscellaneous allocations of Defence amounting to Rs 17,065.12 crore.
While capital funds are needed to sustain the tempo of modernisation by inducting urgently required weapon platforms, the revenue expenditure, however, takes a major share of the overall allocations.
The revenue expenditure, which includes expenses on payment of salaries and maintenance of establishments is Rs 2,01,901.76 crore. The huge gap between capital and revenue expenditure is a major issue facing the Defence Ministry and efforts to narrow down the gap has so far not progressed as desired thereby restricting the funds needed for acquiring better weapon systems.
Moreover, the total outlay does not include Rs 1,12,079 crore set aside separately for payment of pensions. If allocation for pension is included, then the total outlay for Defence stands at Rs 4.31 lakh crore which accounts for 15.47 per cent of the total Central Government expenditure for the year 2019-20. “The capital allocation of Ministry of Defence under BE (budget estimate) 2019-20 is 31.97 per cent of the total Central Government capital expenditure, which is Rs 3,38,569.00 crore,” Singh’s office tweeted.
As regards service wise allotment of funds, the IAF gets the highest amount totaling Rs 39, 302.64 crore as against Rs 35,770.11 crore in 2018-2019, followed by the Army Rs 29,461.25 crore (Rs 26,688.42 crore in last fiscal) and the Navy Rs 23,156.43 crore (Rs 20, 890 crore in 2018-19).
The hike in capital outlay will give the IAF an elbow room to go in acquisitions besides meeting contractual obligation for Rafale jet payment. So far, the Government has paid nearly Rs 40,000 crore to France for 36 jets. The overall cost of the deal is Rs 60,000 crore. The increase in the Army Budget will enable it to acquire modern rifles numbering more than four lakh, anti-tank guided missiles, artillery guns and armoured personnel carriers. The Rashtriya Rifles (RR), the anti-insurgency force of the Army engaged in operations in J&K, has been allotted Rs 24.64 crore as against Rs 22.40 crore for the last financial year.