Even as the Defence Budget for the next fiscal has crossed the RS 3 lakh crore mark for the first time. In real terms, the hike amounts to a modest seven per cent over the current fiscal. The increase in money terms is about RS 20,000 crore as the allocation for financial year 2018-2019 was RS 2,85,423 crore as against RS 3,05,296 crore for 2019-2020. These figures exclude miscellaneous allocations of defence amounting to RS 17065.12 crore. Finance Minister Piyush Goyal assured Parliament additional funds, if necessary, will be provided to secure the country’s borders and maintain defence preparedness.
Presenting the Interim Budget on Friday, he said “Our Defence Budget will be crossing RS 3,00,000 crore for the first time in 2019-20. For securing our borders and to maintain preparedness of the highest order, if necessary, additional funds would be provided,” he said.
The break-up of Defence allocations include RS 1,03, 380.34 crore for capital stream as against RS 93,982.13 crore for the current fiscal to sustain the momentum of modernisation and acquisition of weapon platforms. Moreover, the funds for capital outlay will cater to meet contractual obligations like paying installments for the Rafale fighter jets, warships and four additional P-8 I long range maritime reconnaissance, S-400 air defence missile shield and Apache and Chinook helicopters to name a few. The financial managers will also have to factor in inflation and depreciation while handling capital allocations.
However, the major chunk of overall defence budget is taken away by revenue allocation which will be Rs 1,98,485.76 crores next fiscal as against Rs 1,88, 118.10 for the ongoing financial year. The revenue budget caters for salaries of defence personnel, maintenance of weapons and allied systems, day to day expenditure of petrol and diesel for operating warships, tanks, planes, helicopters and transport all over the country. 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.
As regards capital outlay Service wise, the IAF has got the biggest share for the next fiscal. Goyal allocated Rs 39,302-64 crores. The figure stood at Rs 35,770.11 crore for the ongoing financial year. 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 Army has got the second highest capital allocation of Rs 29,447.28 crores as compared to Rs 26,688.42 crore for 2018-2019. The increase will enable the Army 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 Jammu and Kashmir, has been allotted Rs 24.64crores as against Rs 22.40 crores for the current term. Rs 23, 156.43 crores were allocated for the next fiscal to the Navy. The amount stood at Rs 20, 890.87 crores for the current financial year.
Meanwhile, Goyal said due care of soldiers was taken by the NDA government adding the issue of One Rank One Pension (OROP) which was pending for the last 40 years has been resolved. “The previous governments announced it in three budgets but sanctioned a mere Rs 500 crore in 2014-15 interim budget. In contrast we have already disbursed over Rs 35,000 crore after implementing the scheme in its true spirit,” he said.
The Finance Minister also said the government also announced substantial hike in the Military Service Pay (MSP) of all service personnel and special allowances were given to naval and air force personnel deployed in high risk duties.