HIGHLIGHTS OF BUDGET 2018-19 PART-IV

Defence  Budget  2018-19

Union Budget for the financial year 2018-19 ,  envisaged a total outlay of Rs. 24,42,213 crore. Out of this, Rs 2,95,511.41 crore has been earmarked for Defence. This accounts for 12.10 percent of the total Central Government expenditure for the year 2018-19.

The allocation of Rs. 2,95,511.41 crore represents a growth of 7.81 percent over Budget Estimates (Rs. 2,74,114.12 crore) and 5.91 percent over Revised Estimates (Rs. 2,79,003.85 crore), respectively for the financial year 2017-18.

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Out of Rs. 2,95,511.41 crore allocated for the financial year 2018-19, Rs. 1,95,947.55 crore has been allocated for Revenue (Net) expenditure and Rs. 99,563.86 crore for Capital expenditure for the Defence Services and the Organizations/ Departments under Ministry of Defence. The amount of Rs. 99,563.86 crore, allocated for Capital expenditure, includes modernization related expenditure. The Capital allocation for Ministry of Defence under BE 2018-19 is 33.1 percent of the total Central Government Expenditure on Capital Account, which is Rs 3,00,441 crore.

For Defence Pension, which is over and above the outlay mentioned above, an amount of Rs. 1,08,853.30 crore has been provided in BE 2018-19. This is 26.60 percent above the BE 2017-18 of Rs. 85,740 crore and 14.26 percent over RE 2017-18 of Rs. 95,000 crore.

The approval for the construction of Sela pass has given further impetus to the Defence preparedness.

Is it enough?

The defence outlay works out to just about 1.58% of the projected GDP for 2018-19, the lowest such figure since the 1962 war with China. Though this figure has been steadily declining in percentage terms as the economy expands, military experts contend it should be over 2.5% to ensure the armed forces are capable of tackling the “collusive threat” from Pakistan and China.

The annual defence budgets have shown a discernible trend of declining modernization outlays for new projects, with almost 80% of the outlays earmarked for “committed liabilities” (installments for arms deals inked in earlier years) and a skewed revenue to capital expenditure ratio. This has meant that the Army, Navy and IAF continue to grapple with critical operational gaps on several fronts ranging from fighters, helicopters and submarines to helicopters, howitzers and modern infantry weapons.