The BE for 2012-13 accounted for 1.90 per cent of the GDP, whereas a year earlier it accounted for 1.92 per cent at the RE stage. Thus, it has been a hat-trick of sorts as the defence budget has remained below 2 per cent of the GDP for three consecutive years.
The strategic community, which has been asking for the defence budget to be pegged at 3 per cent of the GDP, is not likely to be amused.
A contrarian view is that the GDP is not the disposable income in the hands of the government and, therefore, the government cannot ensure that a fixed percentage of the GDP is spent on any particular sector. Moreover, a lower percentage of a high GDP would mean more money in absolute terms than a higher percentage of lower GDP.
Pakistan spends more than double of what India spends on defence in terms of percentage of GDP but it is a moot question whether that country is better placed in terms of its national security and territorial integrity than India. The allocation has to be related to the realistically assessed requirements and not to extraneous factors like the GDP.
What is important is the percentage share of defence expenditure in the CGE. The outlay for 2013-14 constitutes 12.23 per cent of the total CGE, which is marginally lower than the percentages for the last two years, which were 12.97 and 12.96 respectively. The share of defence outlay in the CGE has come down from the peak of 15.91 per cent in 2005-06.