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Defence budget increased to Rs 96,000 crore
NEW DELHI, FEB 28 (PTI)
Continuing its drive to modernise the armed forces, the government today hiked the defence budget for 2007-08 to Rs 96,000 crore, an increase of 7.8 per cent over the current fiscal's outlay.
The increase was Rs 10,000 crore more in actual terms, as the defence ministry spent Rs 86,000 crore as against its outlay of Rs 89,000 crore for 2006-07.
Presenting the budget in Parliament, Finance Minister P Chidambaram said the allocation of Rs 96,000 crore would include a whopping Rs 41,922 crore for capital expenditure or acquisition of new hardware, signalling that the armed forces would go ahead with some big ticket weapons deals.
He also promised to provide more funds to the defence ministry if the need arose. "Needless to say, any additional requirement for the security of the nation will be provided," he said.
Defence Minister A K Antony said the continued hike in defence expenditure signalled the UPA government's "resolve to go full steam ahead with the modernisation" of the military.
"I am satisfied with the commitment of providing extra funds made by the finance minister," he said.
Antony, however, said there had been some laxity in certain fields during the modernisation drive, and efforts would now focus on ensuring the upgradation of the arsenal of all three services.
Though Prime Minister Manmohan Singh had said that efforts would be made to meet the demands of defence planners for taking defence spending to around three per cent of the GDP to push the modernisation process, the proposed outlay was only 2.1 per cent of the GDP.
For the past few years, defence spending has been hovering around 2.5 per cent of GDP, much below China's whopping 7.2 per cent and Pakistan's about four to 4.5 per cent of GDP.
It was only in 2004-05 that India made an unprecedented hike of 28 per cent in the capital outlay to become the world largest arms purchaser, pushing China to the second spot.
In a break with tradition, the government made a bold move to hike the outlay on capital expenditure to almost 45 per cent of the total defence budget.
This is part of a new effort launched by the defence ministry to balance defence budgeting equally between recurring expenditure on items like salaries and the outlay for hardware and arms purchases -- a growing concept in the Western military powers.
The idea to strike a 50-50 per cent ratio between expenditure and outlay was the brainchild of External Affairs Minister Pranab Mukherjee, who held the defence portfolio till last year.
"This indicates we are moving in the right direction," Mukherjee said.
With the proposed revenue expenditure of Rs 34,086 crore for 2007-08, the Army continues to hog almost 58 per cent of the defence budget, an increase of 5.54 per cent against last year's allocation.
The Navy has got an allocation of Rs 6,968 crore, a marginal hike of 3.8 per cent against last year's allocation and the IAF Rs 10,193 crore, a hike of about 3.9 per cent.
The allocation for the 39 state-run Ordnance factories continues for the sixth year in running to be on the negative side, making the Government intentions clear for them to perform or perish.
However, the allocation for the Defence Research and Development Organisation (DRDO) has been pegged at around Rs 3,188 crore marking an almost 5.8 per cent increase against last year's revised allocation of Rs 3,011 crore.
But the biggest quantum jump has been the allocation of a whopping Rs 41,922 crore, on capital outlay, which is almost an increase of more than 11 per cent against last year's figure.
Much of the capital outlay is expected to be cornered by some mega arms purchases including floating of international tenders for purchase of 126 Medium Combat Role Aircraft for the IAF and moves by the Army to acquire 197 light helicopters.
Action has also been initiated to acquire much needed spy planes for the Navy and medium lift helicopters for the IA F as well as the Navy.
India's most of the capital outlay expenditure is going in for foreign arms procurements, as the country favours for across the board puchases unlike selective and targeted acquisition by China and Pakistan.
Pakistan by investing mostly in nuclear and missile fields has almost achieved strategic parity with India. China on the other hand by pumping almost 60 billion US dollars into arms imports has raced far ahead.
While Indian money has substantially revitalised military industrial complexes in Russia and Israel, hardly has money or spinoff flown into domestic defence industry.
But with the new concept of 50-50 budgeting, the Defence Ministry hopes to bring technology quantum jump to the Indian defence industry by its new offset policy, making it imperative for all foreign bidders of contracts more than Rs 300 crore to invest thirty per cent of the amount in India.
http://www.outlookindia.com/pti_news.asp?id=454379
------------------
So, its here finally. How much percentage of GDP exactly is this allocation on defense?
NEW DELHI, FEB 28 (PTI)
Continuing its drive to modernise the armed forces, the government today hiked the defence budget for 2007-08 to Rs 96,000 crore, an increase of 7.8 per cent over the current fiscal's outlay.
The increase was Rs 10,000 crore more in actual terms, as the defence ministry spent Rs 86,000 crore as against its outlay of Rs 89,000 crore for 2006-07.
Presenting the budget in Parliament, Finance Minister P Chidambaram said the allocation of Rs 96,000 crore would include a whopping Rs 41,922 crore for capital expenditure or acquisition of new hardware, signalling that the armed forces would go ahead with some big ticket weapons deals.
He also promised to provide more funds to the defence ministry if the need arose. "Needless to say, any additional requirement for the security of the nation will be provided," he said.
Defence Minister A K Antony said the continued hike in defence expenditure signalled the UPA government's "resolve to go full steam ahead with the modernisation" of the military.
"I am satisfied with the commitment of providing extra funds made by the finance minister," he said.
Antony, however, said there had been some laxity in certain fields during the modernisation drive, and efforts would now focus on ensuring the upgradation of the arsenal of all three services.
Though Prime Minister Manmohan Singh had said that efforts would be made to meet the demands of defence planners for taking defence spending to around three per cent of the GDP to push the modernisation process, the proposed outlay was only 2.1 per cent of the GDP.
For the past few years, defence spending has been hovering around 2.5 per cent of GDP, much below China's whopping 7.2 per cent and Pakistan's about four to 4.5 per cent of GDP.
It was only in 2004-05 that India made an unprecedented hike of 28 per cent in the capital outlay to become the world largest arms purchaser, pushing China to the second spot.
In a break with tradition, the government made a bold move to hike the outlay on capital expenditure to almost 45 per cent of the total defence budget.
This is part of a new effort launched by the defence ministry to balance defence budgeting equally between recurring expenditure on items like salaries and the outlay for hardware and arms purchases -- a growing concept in the Western military powers.
The idea to strike a 50-50 per cent ratio between expenditure and outlay was the brainchild of External Affairs Minister Pranab Mukherjee, who held the defence portfolio till last year.
"This indicates we are moving in the right direction," Mukherjee said.
With the proposed revenue expenditure of Rs 34,086 crore for 2007-08, the Army continues to hog almost 58 per cent of the defence budget, an increase of 5.54 per cent against last year's allocation.
The Navy has got an allocation of Rs 6,968 crore, a marginal hike of 3.8 per cent against last year's allocation and the IAF Rs 10,193 crore, a hike of about 3.9 per cent.
The allocation for the 39 state-run Ordnance factories continues for the sixth year in running to be on the negative side, making the Government intentions clear for them to perform or perish.
However, the allocation for the Defence Research and Development Organisation (DRDO) has been pegged at around Rs 3,188 crore marking an almost 5.8 per cent increase against last year's revised allocation of Rs 3,011 crore.
But the biggest quantum jump has been the allocation of a whopping Rs 41,922 crore, on capital outlay, which is almost an increase of more than 11 per cent against last year's figure.
Much of the capital outlay is expected to be cornered by some mega arms purchases including floating of international tenders for purchase of 126 Medium Combat Role Aircraft for the IAF and moves by the Army to acquire 197 light helicopters.
Action has also been initiated to acquire much needed spy planes for the Navy and medium lift helicopters for the IA F as well as the Navy.
India's most of the capital outlay expenditure is going in for foreign arms procurements, as the country favours for across the board puchases unlike selective and targeted acquisition by China and Pakistan.
Pakistan by investing mostly in nuclear and missile fields has almost achieved strategic parity with India. China on the other hand by pumping almost 60 billion US dollars into arms imports has raced far ahead.
While Indian money has substantially revitalised military industrial complexes in Russia and Israel, hardly has money or spinoff flown into domestic defence industry.
But with the new concept of 50-50 budgeting, the Defence Ministry hopes to bring technology quantum jump to the Indian defence industry by its new offset policy, making it imperative for all foreign bidders of contracts more than Rs 300 crore to invest thirty per cent of the amount in India.
http://www.outlookindia.com/pti_news.asp?id=454379
------------------
So, its here finally. How much percentage of GDP exactly is this allocation on defense?
