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Defence Fund Not Enough for Imports

Published: 18th February 2014 06:00 AM  |   Last Updated: 18th February 2014 01:09 AM   |  A+A-

Keeping in mind the modernisation needs of the 13.1-lakh strong Indian armed forces, the government on Monday hiked the defence budget by 10 per cent to Rs 2.24 lakh crore for 2014-15 fiscal, but this was viewed as “not enough” to meet the 70 per cent arms import, done either in US dollars or euros.

Finance Minister P Chidambaram, in his interim budget for the next fiscal, said the allocation for defence “has been enhanced by 10 per cent from Rs 2,03,672 crore in budget estimates of 2013-14 to Rs 2,24,000 crore in 2014-15”. This constitutes about 1.74 per cent of the nation’s Gross Domestic Product (GDP) that is estimated to be Rs 1,28,39,952 crore.

The defence budget allocation worked out to approximately 12.70 per cent of the total central government expenditure of Rs 17,63,214 crore for 2014-15. Of the budgetary allocation for defence,  Rs 1,34,412 crore would go away towards Revenue (Net) expenditure and the remaining Rs 89,588 crore would be used for capital expenditure that would fund the armed forces’ modernisation efforts. This represents a growth of 14.95 per cent and 3.28 per cent over the revenue and capital expenditure in the estimates of 2013-14.

The Defence Ministry had raised a demand for Rs 2,79,203 crore in the 2014-15 budget, of which the revenue expenditure was projected to be Rs 1,87,994 crore and capital expenditure Rs 91,209 crore. Considering that demand, the defence ministry got Rs 55,203 crore less in the overall budget, Rs 53,582 crore less for revenue expenditure and Rs 1,621 crore lesser than its capital expenditure projections.

The Ministry has plans of signing big ticket deals for 126 combat planes estimated to be worth Rs 1 lakh crore, 22 attack helicopters (Rs 7,500 crore), 15 heavy lift helicopters (Rs 5,000 crore), 145 ultra-light howitzers (Rs 4,500 crore), 197 light utility helicopters (Rs 7,500 crore), apart from making a Rs 4,000 crore payment for the already signed six C-130J special operations aircraft, in the next fiscal.



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