Despite the increasing threats from both China and Pakistan and emerging security challenges, India’s spending on defence has dropped by four per cent in terms of the government’s Total Expenditure over the last six years.
In the current financial year 2021-22, the Narendra Modi government has allocated a budget of Rs 4,78,196 crore of defence expenditure which is 13.73 per cent of the total central government expenditure, the ministry of defence informed a parliamentary standing committee.
The Dipping Ratio
This is a drop of four per cent compared to 2016-17 when defence spending was at 17.80 per cent of the total government expenditure. Since then, every year there has been a reduction in defence spending share in the government’s budget.
In 2017-18, it was 17.73 per cent of the total government expenditure, 17.43 per cent in 2018-19, 16.86 per cent in 2019-20 and further dipped to 14.05 per cent in 2020-21.
It’s lowest at 13.73 per cent at a time when India is looking to boost its military power to face the twin challenges — China in wake of the military tussle in Ladakh and Pakistan.
In terms of GDP, there has been a marginal drop over the years as well. From 2.29 per cent in 2016-17, it’s down to 2.15 per cent in the current financial year.
The figures are part of official data on the growth of the defence budget in comparison to the central budget and GDP, in absolute and relative terms that is part of a standing committee report on defence.
“The committee found that the total Defence Budget (including Miscellaneous and Pensions) is Rs 4,78,195.62 crore for the year 2021-22, which is 13.73 percent of total Central Government Expenditure and 2.15 percent of GDP for the year 2021-22. Also, the Capital Budget of the Ministry of Defence for 2021-22 is approximately 25.30 per cent of the total capital expenditure of the Central Government Expenditure,” the report said.
Notably, the capital budget meant for acquiring new military systems and weapons stands at 25 per cent of the total capital expenditure.
The ministry of defence stated that the amount for capital acquisitions aimed at modernisation of armed forces has increased by Rs 41,463.21 crore in absolute terms since 2016-17.
The report mentioned that during the discussion on the subject, the Chief of Defence Staff Gen Bipin Rawat apprised the committee on funds being prioritised towards operational preparedness with regard to the borders of the country.
The CDS informed the committee the budget is further progressively utilised for phased payments towards the procurement, the latter not being an easy process as the requisite equipment and armaments are not readily available either in the country or in the world market.
Mismatch in Projected & Allocated Budget
The committee also observed there has been a “Mismatch between projected and allocated budget for Defence. As against the projection of Rs 6,22,800.51 crore for 2021-22, Rs 4,78,195.62 crore has been allocated for the total Defence Budget i.e. a shortfall of 1,44,604.89 crore.”
The armed forces spent Rs 23,000 crore over and above the original budget allocation of 2020-21, resulting in a meagre 0.4 per cent increase in the capital expenditure this year meant for procuring new equipment, weapons and other gear for troops.
The total allocation for Defence in 2021-22, including pensions, is Rs 4.78 lakh crore compared to Rs 4.71 lakh crore last year. Without pension allocation for 2021-22, it is Rs 3.62 lakh crore in comparison to last year when it was Rs 3.37 lakh crore.
