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Actual defence budget( minus pensions etc) will be close to 40 billion dollar, that's little bit more than last years budget but not much.
Anyway can anyone compare last year's capital outlay for modernisation compared to this years? Any increase? Also what will happen to last year's unused money? ~2 Billion were unused I think.
Any extra money saved from the capital budget is moved to the revenue budget. In case the revenue budget doesn't need more cash infusion, then the unused funds are returned to the exchequer. The exchequer then uses those funds to balance the budget, or reduce fiscal deficit.
Last year, 94K crores was allocated towards capital budget, which dropped down to 85K crores. 75K crores were used, the rest was returned. There was a reduction in capital budget by 8.5% this year. So it's 78K crores now.
It was reduced due to under-utilization. It means, there were delays in some ongoing projects, so money that was budgeted was unspent. Now, the budget is better balanced. But more needs to be done.