New Delhi: In a clear signal that there would be no let up in the ongoing mammoth modernization drive of the armed forces, finance minister P Chidabaram said that the defence allocation for the coming year would be Rs1,05,600 crore, a hike of 10% from last year’s allocation of Rs96,000 crore.
But in actual terms, the hike is 14.16% compared to that of last year as the defence ministry could only spend Rs92,500 crore, leaving a sum of Rs3,500 crore unspent, apparently due to two major contracts for purchase of helicopters and 155 MM artillery guns not going through.
It was amply clear that the budget will focus on continuing upgradation of armaments with the allocation on capital outlay running into Rs48,007 crore, a jack up of almost 23.3% over last year’s outlay of Rs37,705 crore.
Capital estimates last year were Rs41,922 crore of which the defence ministry only spent Rs37,705 crore.
Though there was substantial hike in defence budget, India’s defence spending continued to be below 2% of the GDP far less compared to Pakistan’s 5% and China’s almost 7%.