Def budget as percentage of GDP may appear to be decreasing due to high economic growth: Govt

[Defenceanalyst91]

Def budget as percentage of GDP may appear to be decreasing due to high economic growth: Govt

NEW DELHI: The government on Monday said the defence budget as a percentage of the Gross Domestic Product may appear to be decreasing due to an increasing trend of GDP growth of the country.

In the Union budget, the government had allocated Rs 2.95 lakh crore to defence forces which is estimated to be around 1.58 per cent of the country's GDP. A separate allocation of Rs 1.08 lakh crore was set aside for defence pensions.
This defence budget, in terms of percentage of the GDP, was lowest since 1962. Replying to a question in Rajya Sabha, minister of state for defence Subhash Bhamre said the defence budget, including allocation for miscellaneous expenditure and pensions, was Rs 4.04 lakh crore, which is 16.6 per cent of total expenditure of government for the year 2018-
"Further, capital budget of ministry of Defence for 2018-19 is approximately 33 per cent of the total capital expenditure of the central government," Bhamre said. He said, "Defence budget as a percentage of GDP may appear to be decreasing due to increasing trend in the growth of GDP." In March, the Parliamentary Standing Committee on Defence, headed by BJP MP Maj Gen (retd) B C Khanduri, had come down hard on the government for inadequate allocation of funds to the Army, Navy and the Air Force. The Army had told the panel that it was reeling under severe financial crunch and struggling to even make emergency procurement when China and Pakistan were carrying out modernisation of their defence forces in "full swing".
The then vice chief of Army Staff Lt Gen Sarath Chand had told the parliamentary panel that inadequate allocation of funds in the defence budget for 2018-19 will hit the Army's modernisation plan even as the Chinese military was competing to reach the level of the US. In the Rajya Sabha, Bhamre said allocated budgetary resources are optimally utilised towards meeting the operational requirements of the armed forces. "Depending upon the allocated resources schemes are also reprioritised to ensure that urgent and critical capabilities are acquired without compromise of operational preparedness," he said.

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[randomradio]

The budget should always be above 2%, at least closer to 3%. I hope the govt follows through on the demands of the MoD.

 

[SirHatesALot]

i hope govt stops mob lynching to avoid becoming a certified banana Republic.

 

[Papa Dragon]

The budget should always be above 2%, at least closer to 3%. I hope the govt follows through on the demands of the MoD.

But most of the funds are being under-utilized as of now. I hope the armed forces utilize the funds to the fullest and provide our men with proper gear and weapons

 

[randomradio]

But most of the funds are being under-utilized as of now. I hope the armed forces utilize the funds to the fullest and provide our men with proper gear and weapons

No, the underutilisation rate has been very low.

And this is not dependent on the size of the budget anyway. There will always be underutilisation.

 

[Papa Dragon]

No, the underutilisation rate has been very low.

And this is not dependent on the size of the budget anyway. There will always be underutilisation.

There is a high probability that defense budget may not be increased due to under-utilization of funds

 

[randomradio]

There is a high probability that defense budget may not be increased due to under-utilization of funds

You don't get it, the underutilisation doesn't matter, only the volume matters.

The utilisation rate is well over 95%. What this means is pretty much the entire budget is being used up. So it doesn't matter if the defence budget is $40B or $80B. Even if the utilisation falls to 90%, you are still spending more money with a $80B budget.

Underutilisation will always be there.

 

[Skull and Bones]

i hope govt stops mob lynching to avoid becoming a certified banana Republic.

This is my biggest concern too.

 

[Storm Force]

What is the percentage when you combine the military pension and the budget together

My guess it would rise from 1.6% .of GDP to 2.2,% ,of GDP

 

[Tshering22]

The budget should always be above 2%, at least closer to 3%. I hope the govt follows through on the demands of the MoD.

The structuring of funds vis-a-vis the capital acquisitions plan is totally out of sync, it is never that the military is short of money but it is short on where and how to optimally spend it.

Did you know, that in the last 5 years MoD keeps returning 6-10% of allotted money back to MoF?

About 80% of the total budget is just to maintain facilities, pay salaries, retirement pensions etc. That's why we need to reduced the number of troops and increase the quality of equipment, training and living per soldier.

What is the percentage when you combine the military pension and the budget together

My guess it would rise from 1.6% .of GDP to 2.2,% ,of GDP

Not even close. 1.8% by a maximum stretch. And mind you, capital acquisition remains in the dumps as only 20-22% of the total is ever allotted to over 6 different arms (including DRDO and other government defence agencies).

 

[LASER1]

i hope govt stops mob lynching to avoid becoming a certified banana Republic.

That's the duty of state police. The central government cannot start policing every nook and corner.
India has one of the lowest police per capita in the world. Improve policing and mobe justice will be gone for good.

 

[randomradio]

The structuring of funds vis-a-vis the capital acquisitions plan is totally out of sync, it is never that the military is short of money but it is short on where and how to optimally spend it.

Did you know, that in the last 5 years MoD keeps returning 6-10% of allotted money back to MoF?

That's fine. It's the case in pretty much all ministries, not just the MoD. The returned funds are used to balance the budget. It happens because contract negotiations end up getting pushed to the next year. Most of the times the MoF deliberately keeps it unspent in order to balance the budget later. So just pushing the negotiations by a month or two means the MoF gets some money back, and the contract is signed in the new financial year.

About 80% of the total budget is just to maintain facilities, pay salaries, retirement pensions etc. That's why we need to reduced the number of troops and increase the quality of equipment, training and living per soldier.

The ratio is 60:40, in favour of revenue. Goes to 85:15 when it comes to the army. But the IAF and IN have a healthy 40:60 ratio.

We don't have to reduce our teeth, instead we need to increase it by quite a bit. What we need to do is cut the tail end of our forces by buying easy to maintain systems which require less manpower to maintain, which is happening.

 

[Vergennes]

That's the duty of state police. The central government cannot start policing every nook and corner.
India has one of the lowest police per capita in the world. Improve policing and mobe justice will be gone for good.

A change of mentality has to be taught to every tom dick and harry,that it's the Police's and justice's job to arrest people,establish proofs they are guilty or not and bring sanctions if needed be.