The defence budget was increased by a mere 7.81 per cent to Rs 2.95 lakh crore against last year’s Rs 2.74 lakh crore, belying expectations of a significant hike when the armed forces are facing growing challenge on the borders with both Pakistan and China.
In his budget address, finance minister Arun Jaitley said the government will develop two defence industrial production corridors and bring out an industry-friendly military production policy to promote the domestic defence industry.
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.
The revenue expenditure which includes expenses on payment of salaries and maintenance of establishments has been pegged at Rs 1,95,947 crore.
The allocation has been estimated at around 1.58 per cent of the GDP and 12.10 per cent of the total budget of Rs 24,42,213 crore for 2018-19.
Last year, the hike in defence budget was 6.2 per cent compared to allocation in 2016-17. The increase was 9.76 per cent for 2016-17 compared to 2015-16.
A separate amount of Rs 1,08,853 crore has been set aside over the above the total allocation for the paying pension to defence personnel.
The amount for defence pension is an increase of 26.60 per cent over the allocation of Rs 85,740 crore last year.
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