New Delhi, February 28
Defence remained high on the government’s priority list, specially with the prevailing security scenario in the Indian sub-continent forcing Finance Minister Jaswant Singh to make a substantial hike of 16.6 per cent over the last year’s revised estimates.
Assuring the armed forces of the continued support of the government and a subsequent increase in the allocation if required, Mr Jaswant Singh earmarked Rs 65,300 crore for defence in the year 2003-04 which is Rs 9,300 crore more over last year’s revised estimate of Rs 56,000 crore.
Pegging the allocation as the highest in the recent years, last year’s budgetary allocation of Rs 8,000 crore being somewhere near, the Finance Minister gave a clear indication of the country’s security concerns. Only the year 2000-2001 was an exception when there was a 30 per cent allocation mainly due to the limited war which India fought with Pakistan in Kargil.
Although the Ministry of Defence (MoD) returned Rs 9000 crore from the last year’s budgetary allocation of Rs 65,000 crore as unspent, the Finance Minister chose to return almost the same amount for further modernisation of the armed forces.
However, in real terms, there has been hardly any hike in the budgetary allocation. Just about Rs 300 crore over the Rs 9000 crore returned unspent.
The money returned also reflected the continued cautious approach of the MoD which was first reflected in 2001-02 when Rs 4,126 crore was returned unspent mainly due to the Tehelka expose. Last year, Rs 5,000 crore of allocated sum had been returned.
The Finance Minister gave clear indications that the government’s stress was again on providing the cutting edge to the armed forces. As in the past, there has been an increase in allocation for acquisition of arms, equipment and aircraft for the three arms of the Indian defence.
As was the case last year, there is a sharp Rs 6,500-crore increase in the capital outlay for the defence services over the last year’s revised estimates. While the revised estimates stood at Rs 14,911 crore, the allocation this year is pegged at Rs 20,952 crore. This amount, however, is less than the allocation of Rs 21,410 crore last year.
In the capital outlay, the Indian Air Force and the Navy have got a lion’s share with more than Rs 5,700 crore allocated for the aircraft and more than Rs 5000 crore allocated for the naval fleet. The Army and the Air Force also get more than Rs 3900 crore and Rs 1000 crore, respectively, for other equipment.
The allocation reflects the government’s inclination for giving its clearance to some of the pending deals. Not only is the proposal for the purchase of the Advance Jet Trainers pending, but also the case of the aircraft carrier for the Navy.
The budgetary allocation this year amounts to about 3.1 per cent of the GDP which is the same as was pegged at last year. The allocation, incidentally, is on the higher side than in the recent past where it has been near the 2.5 per cent of the GDP.
India, however, remains one of the lowest spenders on defence in the region when compared to Pakistan’s defence spending of 4.6 per cent of GDP and 5.5 per of China.
While, still to take a final decision on the Defence Ministry’s proposal to evolving a three-year revolving budget to facilitate armament purchases, the government, as a gesture, has apparently agreed to the carrying over of Rs 9,000 crore of unspent funds from the 2002-03 Budget
For the first time, as a measure to bringing in greater transparency, the government has created separate budget heads for the capital outlay as well as Defence Research and Development Organisation (DRDO). Finance Minister allocated more than Rs 2700 crore just for defence research and development which is separate from the capital outlay.
The Army, as usual, has got a major share of the defence budget which stands as a 13 paise share in one rupee of total spending. The Army this year has been allocated Rs 28921.12 crore which when compared to even last year’s revised estimates of Rs 29619.88 crore is less by Rs 698.76 crore and almost Rs 1770 crore less than the amount allocated in 2002-03.
The Navy has been allocated Rs 4950.54 crore which is almost Rs 600 crore more than last year’s revised estimate of Rs 4359.57 crore.
The major gainer this year again has been the IAF which has been allocated Rs 8324.08 crore, almost Rs 904 crore more than last year’s revised estimate of Rs 7419.49 crore.
