New Delhi: After much hype over the modernisation drive of the armed forces and talk of war on two fronts, the allocation for the Defence Budget 2020-21 was only a marginal increase of about 5.8 per cent totaling Rs 3.37 lakh crore for the current financial year.
The allocation for the crucial capital outlay which goes towards modernisation was a comedown as the increase was very marginal as compared to the budget estimates and revised estimates of 2019-20.
With an imperative need for providing the latest equipment to the armed forces which face tension along the Northern and Western borders – China and Pakistan respectively – there was need for several big ticket projects.
In her speech lasting over two hours, Finance Minister Nirmala Sitharaman made no mention of the defence budget considering that she had held that portfolio before becoming Finance Minister but in her speech she focused on other sectors rather than defence.
As part of Rs 3.37 lakh crore allocated for defence for 2020-21, Rs 1.18 lakh crore is the capital outlay and Rs 2.18 lakh crore is the revenue head. The capital outlay for the budget estimate for 2019-20 was Rs 1.08 lakh crore. So, there has only been an increase of Rs 10,306.2 crore in the capital head for 2020-21 as compared to what it was for the current financial year.
Similarly, there has only been an increase of Rs 3,183.64 crore in the capital head as compared to what it was in the revised estimate for 2019-20. The capital outlay for the revised estimate was Rs 1.15 lakh crore.
The bare minimum increase in capital outlay will drastically affect several major acquisitions of Indian Army, Indian Navy and Indian Air Force. The Army is already procuring high-end artillery systems such as M777 ultra light howitzers, K-9 Vajra self-propelled gun and the indigenously developed Dhanush for the frontiers with China and Pakistan. Payments for these are ongoing.
The meagre allocation will also affect Indian Navy, which had earlier approached the government for additional funds amid a severe financial crunch that is forcing it to rationalise and reduce its requirements. Due to the low budget, the Navy has had to rework its plan of having 200 warships by 2027.
It may be noted here that the Navy has been pushing to get its share of the defence budget back to the 18 per cent it was in 2012-13 from 13 per cent for the current financial year. It has also had to cut down on the numbers planned to be acquired in some projects such as Mine Counter Measure Vessels and P-8I maritime reconnaissance aircraft.
The defence budget this time is only a 5.8 per cent hike as compared to defence budget estimate of 2019-20, while it is only a 1.9 per cent increase over the revised estimate.
The revenue head continues to remain larger than the capital outlay. This is mainly because of the large number of pays and allowances, including increments that have to be paid for the personnel of the defence forces. However, this head too has witnessed only a marginal increase over what it was in budget and revenue estimates of 2019-20. Meanwhile, separately Rs 1.33 lakh crore is the allocation for pensions.
With the appointment of the Chief of Defence Staff (CDS) with the Department of Military Affairs (DMA) manned by about 35 senior officers of the government, the allocation was expected to be increased considerably which has not happened.
Commenting on the budget, Defence Minister Rajnath Singh said: “The first Budget of the new decade presented today by Finance Minister Nirmala Sitharaman gives an outline of a New and Confident India. It is a promising, proactive and progressive Budget which will make India healthy and wealthy in coming years.”
