Defence budget hiked by nearly ten per cent

New Delhi: The defence budget was on Monday increased by 9.76 per cent to Rs 2.58 lakh crore for the next fiscal as compared to the revised estimates of Rs 2.33 lakh crore for 2015-16 even as military pension zoomed to Rs 82,000 crore mainly due to the One Rank One Pension scheme.

The capital outlay for the three services, for modernisation, stood at Rs 78,586.68 crore.

However, Finance Minister Arun Jaitley made no mention of the defence allocation for 2016-17 in his Budget speech.

The defence budget accounts for nearly 17.2 per cent (this includes the pension budget along with the defence budget) of the total central government expenditure for the year 2016-17 which is Rs 19.78 lakh crore.

The budget allocation only for defence (excluding pension) is Rs 2,49,099 crore and out of this Rs.1,62,759 crore is for revenue expenditure which includes provision towards ordinance factories, R&D, DGQA, Rashtriya Rifles, Military Farms, ECHS and NCC.

The highest jump has been in the pension expenses. While the revised estimate for the current fiscal was Rs 60,238 crore, it has jumped to Rs 82,332.66 crore for the coming financial year.

In comparison, there has been a marginal increase of Rs 4287.07 crore in the capital expenditure of the three services which are in the process of modernising their equipment.

One reason for small hike could be that the Defence Ministry was unable to utilise the full capital budget for the current fiscal.

The budget comes at a time when the three services are in the last stages of negotiations for multi-billion dollar deals for Rafale fighter jets, Apache, Chinook and Kamov helicopters and the M777 light weight howitzers.

Incidentally, the total value of these projects exceeds the capital outplay. "The payments are done in a phased manner and no payment is paid in full," defence sources said.

According to defence sources, 86 deals worth approximately Rs 1,50,000 crore are close to the final stage of approval.

Defence Minister Manohar Parrikar had recently directed all concerned to make concerted efforts to get these deals cleared in the next 4-5 months within the first quarter of the next fiscal.

India has once again emerged as the world's largest importer of arms, with Russia being the top supplier garnering 70 per cent of the Indian market.

India's imports, accounting for 14 per cent of global arms imports, were three times greater than those of China and Pakistan in the period 2011-15.