Defence and Security

Not On A War Footing

Feb 14, 2017
Having made no reference to the defence budget in his budget speech last year, much to the chagrin of many, Finance Minister Arun Jaitley made an almost passing reference to it when he presented the Union budget on February 1. At Rs 2,74,114 crore, excluding the outlay of Rs 85,740 crore for defence pensions, the allocation is prima facie inadequate, though not surprising.
In his medium-term fiscal policy statement last year, the FM had stated that the total defence expenditure is estimated at about 1.6 per cent of GDP in 2017-18 and 2018-19. If that is any consolation, the proposed defence outlay does not disappoint at least on that score. Many defence analysts, and even the standing committee on defence, have been rooting for defence outlays to be pegged at three per cent of GDP — while that seems unlikely in the near future, focus on this demand overshadows many other concerns.
The first reaction has been how it would adversely affect modernisation of the armed forces. Unfortunately, repeated underutilisation of the capital budget weakens the case for higher allocations for new acquisitions. It is not uncommon to hear that underutilisation of the capital budget is because of the finance ministry’s machinations, which wouldn’t let big contracts be approved, so it could withdraw huge sums from the MoD to meet the fiscal target.
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Indian Express, February 14, 2017

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