Article Posted on : - Jul 06, 2009

Government hikes the budgetary allocation for defence to Rs 1,41,703 crore.

NEW DELHI (PTI): With an aim of fast-tracking procurement of defence equipment, the government Monday steeply hiked the budgetary allocation for defence to Rs 1,41,703 crore, a 34 per cent increase over the previous fiscal.

The increase in real terms amounted to Rs 36,103 crore over last year's allocation of Rs 1,05,600 crore, and is apparently intended to speed up procurement of defence equipment and plug the security gaps exposed by the November 26 Mumbai terror attacks last year.

The 34 per cent increase is substantial compared to the increase of only 10 per cent effected in last year's budget over Rs 96,000 crore allocated in 2007-08. In fact, Finance Minister Pranab Mukherjee had allocated the same amount for defence in his interim budget presented in Parliament on February 16 before the Lok Sabha polls.

Despite the hike this year, India's defence spending is still at about 2 per cent of the GDP, compared to China's 7 per cent and Pakistan's 5 per cent.

The Defence Ministry had returned nearly Rs 7,000 crore as unspent money from its last year's capital outlay of Rs 48,007 crore as its plans to procure light utility helicopters and 155mm artillery guns did not fructify.

The increased allocation for defence assumes significance as the government had decided to fast-track acquisition of equipment for the armed forces following the Mumbai attacks.

The defence forces have already prepared a long list of equipment, mainly for its special forces' commandos who carry out specialised strikes, including anti-terror operations, to be bought under the fast track process.

After the Mumbai attacks, the government also initiated a massive revamp of the nation's security structure, which includes creation of a Coastal Command and entrusting overall responsibility for maritime security with the Navy and integrating activities of all sea-faring ministry and departments including Petroleum, Shipping, and Fisheries.

It also approved the Coast Guard's request for purchase of fast patrol craft for securing the long-winding 7,417-km coastline and to hire helicopters for maritime reconnaissance.

The increased non-Plan expenditure for defence this year will include Rs 86,879 crore revenue expenditure, an increase of Rs 13,279 crore over last year's Rs 73,600 crore.

It will also include Rs 54,824 crore for capital expenditure, an increase of Rs 13,824 crore as against Rs 41,000 crore in the revised estimates for 2008-09.

From the Rs 54,824 core capital outlay for 2009-10, Defence Ministry officials said about 95 per cent would go towards procurements for the Army, Navy, Air Force and the Coast Guard and the rest 5 per cent towards research and production units.

Of the total budgetary allocation for 2009-10, the Army was earmarked Rs 58,648 crore, Rs 8,322 crore for Navy, Rs 14,318 crore for Air Force, Rs 833 crore for Ordnance factories and Rs 4,458 crore for research and development.

From the Rs 54,824 crore capital outlay, the Army was allocated Rs 17,768 crore, Navy Rs 11,874 crore, Air Force Rs 19,951 crore and research and development Rs 3,724 crore.

The Armed Forces Tribunal, set up last year, was given Rs 53.41 crore to meet its expenditure and another Rs 25 crore towards construction of a building in New Delhi to house it.