India's Defence Budget Hiked by 10% :: Crosses $50 billion

[jaiind]

The defence budget for 201617 was increased by 9.76 per cent to Rs. 2.58 lakh crore as compared to the revised estimates of Rs. 2.33 lakh crore for 201516 even as military pension zoomed to Rs. 82,000 crore mainly due to the One Rank One Pension scheme.

The capital outlay for the three services, for modernisation, stood at Rs. 78,586.68 crore.
However, Finance Minister Arun Jaitley made no mention of the defence allocation for 2016-17 in his Budget speech. The defence budget accounts for nearly 17.2 per cent of the total central government expenditure for the year 201617 which is Rs. 19.78 lakh crore. This includes the pension budget along with the defence budget.

The highest jump has been in the pension expenses. While the revised estimate for the current fiscal was Rs. 60,238 crore, it has jumped to Rs. 82,332.66 crore for the coming financial year.

In comparison, there has been a marginal increase of Rs. 4287.07 crore in the capital expenditure of the three services which are in the process of modernisining their equipment.

One reason for small hike could be that the Defence Ministry was unable to utilise the full capital budget for the current fiscal.

The budget comes at a time when the three services are in the last stages of negotiations for multibillion dollar deals for Rafale fighter jets, Apache, Chinook and Kamov helicopters and the M777 lightweight howitzers.

Incidentally, the total value of these projects exceeds the capital outplay. "The payments are done in a phased manner and no payment is paid in full," defence sources said.

According to defence sources, 86 deals worth approximately Rs. 1,50,000 crore are close to the final stage of approval.

Defence Minister Manohar Parrikar had recently directed all concerned to make concerted efforts to get these deals cleared in the next 45 months within the first quarter of the next fiscal.

India has once again emerged as the world's largest importer of arms, with Russia being the top supplier garnering 70 per cent of the Indian market. India's imports, accounting for 14 per cent of global arms imports, were three times greater than those of China and Pakistan during 2011-15.

 

[Abingdonboy]

Thanks to a mammoth pensions bill, in real terms the defence budget will be less in 2016-17.

 

[Armani]

They need to trim down the current "defence budget" definition into actual defence expenditure.

The allocation for all government-given pensions should be accounted separately...including pension for ex-Servicemen. It seems cynical to me when you include pension given to ex-personnel who are not contributing to nation's defence at the moment as part of "defence budget".

 

[Abingdonboy]

They need to trim down the current "defence budget" definition into actual defence expenditure.

The allocation for all government-given pensions should be accounted separately...including pension for ex-Servicemen. It seems cynical to me when you include pension given to ex-personnel who are not contributing to nation's defence at the moment as part of "defence budget".

If I'm being cynical I would say that there is a reason for this. Think about it from a poltican's perspective- they are able to appease one constituency (vetrans) but also able to claim in front of the masses (who are indifferent to such affairs and not interested in the nuances) "I have raised defence spending, I am ensuring you are safe".

 

[PARIKRAMA]

I actually feel PM NaMo and FM AJ has taken a very good gambling position..

Primarily the 82000crs pension or OROP reaches in the hands of ex forces but when I look all I see is normal consumer who has been given a ability to spend... Assuming that a quarter of these 82000 crs remains in some form of savings in our financial system... There is clearly an adequate 61500 crs available to spend ...

Now imagine what and where such veterans will spend.. This injection of almost USD 9Bn in consumer spending acts as a natural demand driver for mostly white goods industry and in FMCG segment... Thus, this increase in demand and spending implies this 9 Bn also is basically cycled back into the economy along with another 3Bn lying in the financial system..

So,what you observe here is that this whole budget is to increase a dose of domestic demand.. Primarily from rural and semi urban India where majority of our untapped economy exists..

In such a scenario, effectively by the time of election year I won't be surprised to see 9% + growth.. Even if other legislations remains in stalemate..

The reason being in today's economy the slowest growing segment is agriculture and second is industries.. For industries you are creating domestic demand by increasing consumer spending. And for agriculture you are addressing rural economy.. Effectively by just maintaining the services at same level of growth, the other 2 can multiply the whole base effect..

This to me is a coup by silent actions.. Every body will perceive not too highly about this budget.. But smartly NDA is creating the domestic demand...

On a side note I expect better show now in state elections.. Bcz pro agriculture and common man budget hits opposition hard where it hurts the most..

And what's the benefit for defense?
Next year and year after when budget base expands due to growth in economy, the same % retained will yield extra free money for modernization.. And that modernization also will be cycled back as make in India the major part of course..

So you see its a economic coup..

 

[Masterhunter]

Lol. The poor black sheep of the world spending so much on the military. Good for us, India will rot from inside!

And pray plz tell me how much u spend of defense... More than 3%....about 7-8 billion dollars... I think...
Also we can spend so much because we have so much money... How much do u have mate.....

 

[Laozi]

Union Budget 2016: Marginal hike of 9.7% in India’s defence budget

India on Monday announced it would spend Rs 2.58 lakh crore on defence in 2016-17, a marginal hike of 9.7% over last year’s revised estimates of Rs 2.33 lakh crore (PTI file photo )

India on Monday announced it would spend Rs 2.58 lakh crore on defence in 2016-17, a marginal hike of 9.7% over last year’s revised estimates of Rs 2.33 lakh crore. The military spending does not include defence pensions that would take up the budget to nearly Rs 3.41 lakh crore compared to last year’s Rs 2.93 lakh crore.

The pension component of the budget is huge at Rs 82,332.66 crore, with the outgo towards implementing the one rank-one pension scheme contributing to the financial burden. The revised estimates for pensions stood at Rs 60,238 crore in 2015-16.

The allocation for military modernisation in the budget stands at Rs 87,209.63 crore.

If the hike in the defence outlay is calculated against the budget estimates of 2015-16, it works out to only 1.16%. Finance minister Arun Jaitley made no mention of India’s defence allocation in his Budget speech on Monday.

The defence ministry failed to spend Rs 11,595 crore of its capital budget earmarked for buying new weapons and systems last year, besides over Rs 6,700 crore of the expenditure budget remained unspent.

The budget for 2016-17, excluding pensions, accounts for 1.7% of the country’s gross domestic product. Experts believe India’s military spending should be around 3% of the GDP to counter China’s rapidly growing military might. If the pensions are counted, the allocation accounts for 2.2% of the GDP.

Experts feel that the funds made available to the armed forces may not be sufficient to power critical modernisation programmes. India’s modernisation effort centres around buying new fighter planes, building next-generation submarines, helicopters, missiles and artillery guns. Strategic affairs expert Brigadier Gurmeet Kanwal (retd), said, “I don’t think there’s been a hike at all in real terms. The rupee has fallen against the dollar from 62 to 69. Also, inflation in prices of weapon systems can be around 15%.” Officials said 86 deals worth close to Rs 1,50,000 crore were nearing the final stage of approval.

This year’s defence spending includes a revenue expenditure of around Rs 1.68 lakh crore for meeting the military’s day-to-day expenses.


India’s defence spending averaged 1.59% of the GDP from 1947 to 1962, the year India fought a war with China. The country sustained a defence spending of 3.1% of the GDP between 1963 and 1988, but it has remained under the 2%-mark for several years now.

A report released by the Stockholm International Peace Research Institute last week showed that India had once again topped the list of the largest weapons importing countries in the world, accounting for 14% of global imports.

China and Pakistan rank second and fourth on that list with their imports accounting for 4.7% and 3.3% of the global figure during 2011-15. India’s imports increased by 90% between 2006-10 and 2011-15, the report said.

Union Budget 2016: Marginal hike of 9.7% in India’s defence budget | union-budget$budget-and-industry | Hindustan Times

 

[Mitro]

Please spend some money for farmers and education.

 

[Sam.]

Then why is poverty in India much higher than in Pakistan?

We can not help you as you pretend to be ignorant.

Please spend some money for farmers and education.

This is a pro-farmer bill :O

The hell you talking about.( I am sad as i wanted more on infrastructure )

 

[Skull and Bones]

Anything for Rafale?

 

[Abingdonboy]

Anything for Rafale?

There is no seperate budget for the Rafale or any other procurement- the funds are there, we know that because the IAF itself had a few billion in unspent CAPEX in this FY.

 

[randomradio]

The hell you talking about.( I am sad as i wanted more on infrastructure )

Come on, live for one year without infrastructure. Let's hope state govts and private sector invest more on infrastructure instead.

The farmers have been living under drought conditions for 2 years now.

 

[dadeechi]

We can not help you as you pretend to be ignorant.


This is a pro-farmer bill :O

The hell you talking about.( I am sad as i wanted more on infrastructure )

Vajpayee's India shining campaign with Infrastructure development did not work hence BJP changed the focus on the villages. Let's see if this works.

 

[Perpendicular]

About time the Army should look at restructuring option, capping or reducing troop number whereas focusing on increasing capability of an individual soldier and Army as a unit on whole.
Thats the next step in modern warfare I believe.

 

[Ankit Kumar]

About time the Army should look atNaxal ructuring option, capping or reducing troop number whereas focusing on increasing capability of an individual soldier and Army as a unit on whole.
Thats the next step in modern warfare I believe.

Reducing numbers is not a solution.

I have had talked with CRPF men who conduct anti Naxal, operations near my city. They have 2 concerns. 1. the gear they have is highly inadequate. 2. There numbers are less, every time I have met them, they have mentioned that the lack of numbers has hampered operations.