Defence budget may touch 40 billion dollars

[Abingdonboy]

Its a old trick they will say they are increasing but takes back large unspent sum of money every year.

So, in practice Indian forces have less money then announced in budget.

They should make non lapsable fund for defense modernization as they are doing for the north east railway and infrastructure projects.

Well if you see in the article it states the majority of the budget has been spent this FY year so this is a real increase in defence spending. Pretty good news, setting 3% as the target and then maintaining this year on year would be better though. With anuual economic growth averaging 8% year on year this would be a nice increase to defence spending year on year (not to mention the 0.5% increase that would occur year 1 when spending jumped from 2.5-3%). India's defence spending as a proportion of GDP is still one of the most minimal in the world, the 3% target has been floated out numerous times but there does seem to be some opposition/lack of movement to this.

 

[Tshering22]

I expected to be around 41-42 billion, but its ok looking at the depressiation of rupee...

What depreciation mate? Its back to normal now almost. You know, I was already thinking that we've crossed $40 billion mark. You see, defense budgets are things that are like हाथी के दाँत... खाने के और, और दिखाने के लिए और..

 

[jackyy]

What depreciation mate? Its back to normal now almost. You know, I was already thinking that we've crossed $40 billion mark. You see, defense budgets are things that are like हाथी के दाँत... खाने के और, और दिखाने के लिए और..

you mean unofficial budget

 

[shiv]

Its a old trick they will say they are increasing but takes back large unspent sum of money every year.

So, in practice Indian forces have less money then announced in budget.

They should make non lapsable fund for defense modernization as they are doing for the north east railway and infrastructure projects.

Dude, that is how system works and I dont see any problem in it. IMO, all sort of funds are issued with a lapse period. I remember, when our college hostel were given 2lacs for improvement, we had to spend it in 3 months. Otherwise money would have gone back to our Institute Director's account.

 

[angeldemon_007]

As the Defence Ministry has succeeded in spending its complete budget for the second consecutive year in 2011-12, the demand will find more takers.

Well this is not true. MOD has spend 70 % of the budget and rest is returned back leaving IA without anything. I think considering next year some huge deals like MMRCA, air refuelling, basic trainer, 197 LUH, 145 M777, 22 heavy attack chopper, 15 heavy lift choppers, ATGM (if not signed yet), follow on order for various aircrafts, GE414 engine, upgrade of Jaguar (if not signed yet) and may be even choppers for IN and ICG are going to be signed.
We should have have signed deals like basic trainer, 197 LUH, Javelin ATGM, M777 in this financial year itself.

 

[keeninterest]

Looks sustainable and achievable.

Revenue receipt (tax/non-tax) for the fiscal, ending 31st march, 2012, should vary between 235-240 billion usd, as per the projections.

India has over the past few years loaned a near 20-25% of the budget, so the projected budget for fiscal should vary between 300-315/320 billion usd. 40 billion usd will mean a near 13% of budget, which is a very healthy rate, considering India is significantly increasing the social expenditure, which burdens the exchequer significantly.

The economy should be hover between 1.95-2.1 trillion usd, backed on near 20(+)% nominal gdp growth. 40 billion usd will a/c for just a little over 2% of gdp, which will again be considered a very healthy rate.

The figure of 3% of gdp isn't sustainable, given the huge social expenditure the country is, and intends to incur, and this burden is expected to increase further, with next general elections in another 2years time line, as such there is talk of a legislation of "health for all". The worrying factors remain the ever growing fiscal deficit, and the very low, 10.5% (expected) tax to gdp ratio for the fiscal.

India for the 1st time spent the complete defence budget last fiscal, and this fiscal again, the MoD is well on track to spend the complete budget, so this should come as a sigh of relief to the defence experts, and enthusiasts, alike.

PS: figures in US dollar terms are deduced at Rs.45/dollar, though rupee is expected to trade between 46/47 by the end of the fiscal based on heavy inflow of dollar.