Defence Budget: Nearly 19 pc increase in capital expenditure, says MoD; Not enough says expert

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February 01, 2021 6:36 PM

Union Budget 2021 India: There is an increase of 8 per cent over 2020-21 and 8.5 per cent over 2019-20 in the allocation for Defence Research and Development Organisation which has been increased to Rs 11,375.50 crore.

Budget 2021-22: According to the defence Ministry statement on the budget, in the last 15 years, this is the highest ever increase in capital outlay for defence.Budget 2021-22: According to the defence Ministry statement on the budget, in the last 15 years, this is the highest ever increase in capital outlay for defence.

Indian Union Budget 2021-22: Defence allocation in the budget has been increased to Rs 4, 78,195.62 crore for the Financial Year 2021-22. According to the Ministry of Defence, excluding Defence Pension, the total allocations for Defence Services and other organizations /Departments under Ministry of Defence for the FY 2021-22 is Rs 3,62,345.62 crore. This means there is an increase of Rs 24,792.62 crore over the current FY 2020-21.

What exactly does the Ministry of Defence say?

There is a significant increase in the allocation under capital expenditure which relates to modernisation and infrastructure development of the Armed Forces. And it compares it with previous years’ allocations.

In the allocation made under Capital of Rs 1,35,060.72 crore for 2021-22, there is an increase of 18.75 per cent over FY 2020-21 and 30.62 per cent over FY 2019-20. It adds, “This is the highest ever increase in capital outlay of Defence in the last 15 years.”

To meet operational requirement, under Non-Salary Revenue it has been increased to Rs 54,624.67 crore and this is according to the MoD a 6 per cent growth over FY 2020-21.

There is an increase of 8 per cent over 2020-21 and 8.5 per cent over 2019-20 in the allocation for Defence Research and Development Organisation which has been increased to Rs 11,375.50 crore.

For the Border Roads Organisation (BRO), it has gone up by 7.48 per cent over FY 2021-22 and 14.49 per cent over FY 2019-20. For the next FY it has been allocated Rs 6004.08 crore.

What did the Defence Minister say?

According to the defence Ministry statement on the budget, in the last 15 years, this is the highest ever increase in capital outlay for defence.

Also Read: Check Union Budget 2021 Live Updates here:

Defence Minister Rajnath Singh has thanked Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for increasing the defence budget to 4.78 lakh crore for the Financial Year 2021-22 (FY21-22). This includes capital expenditure worth Rs 1.35 lakh crore.

Meanwhile … view from an expert

Lt Gen Anil Ahuja, former Deputy Chief of Integrated Defence Staff (Policy Planning and Force Development) says, “The omission of reference to the defence budget, yet again, in the Finance Minister’s budget speech and a meagre increase from Rs3.37 Lakh Crore (less pensions) last year to Rs 3.62 lakhs Crore this year suggests that for the budget planners, it is business as usual, notwithstanding the 10 months long ongoing standoff along the Northern borders.”

According to the former Additional Director General Military Operations, “The omission of reference to the defence budget, yet again, in the Finance Minister’s budget speech and a meagre increase from Rs3.37 Lakh Crore (less pensions) last year to Rs 3.62 lakhs Crore this year suggests that for the budget planners, it is business as usual, notwithstanding the 10 months long ongoing standoff along the Northern borders.”

“Considering the country’s financial constraints following the COVID pandemic, it would have been unrealistic to expect any substantial increase in defence budget allocations. These constraints could have however been well made-up by signaling diligence in defence planning by alluding to the thrust areas in which these meager resources are proposed to be channelised. For example, Developing mountain warfare capability / ISR/MDA capability or acquiring unmanned aerial vehicles capability/cyber or electronic warfare capability/ clearing DAC approved pending acquisitions etc – whatever they may be!! Absence of this reflects mere `apportioning’, as has been the practice hitherto,” Lt Gen Ahuja, Co-Chair of India -US DTTI, Inter-Agency Task Force (DIATF), observes.

According to the Indian Army veteran, “An indication of priorities in budget speech would reflect some internal rigour in planning defence capability development and prioritising acquisitions, in face of financial resource crunch. This in itself would be a confidence-building measure for the defence forces and industry – be it indigenous or of friendly foreign countries. To those who believe that due to greater indigenous acquisitions we can buy more for less (money). It may be worth reminding that we have a long way to go on high-end indigenisation and that at least at initial stages, indigenisation is an expensive proposition, which requires financial support.”

“My pragmatic expectation from this budget was not so much about more money for defence, but of a signal that we have taken a step further in streamlining our planning process, with the challenge across our borders and with the reform of CDS and DMA in place. Let the MOD / DMA /CDS do this prioritisation now- even within these meagre resources,” Lt Gen Ahuja concludes.

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