Union Budget 2021: Negligible hike in defence budget; More needed to prepare the armed forces

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Updated: Feb 01, 2021 5:06 PM

Budget 2021 Live from Parliament, Union Budget 2021-22 Live Updates: Amidst the ongoing stand-off between India and China along the Line of Actual Control (LAC) since last May, the hike in the defence budget announced today (February 1, 2021) is negligible.

Union Budget 2021, Budget 2021The defence budgetary estimate was of Rs 323,053 crore till March 2021.

Budget 2021 Announcements, Union Budget 2021 Announcements, Budget 2021 News: Amidst the ongoing stand-off between India and China along the Line of Actual Control (LAC) since last May, the hike in the defence budget announced today (February 1, 2021) is negligible. “In view of the many challenges being faced by India, the Budget 2021-2022 was indeed a challenging one for the Finance Minister. The pulls and pressure abound from the fight against Covid to China face-off in Ladakh region, the Defence outlay was being watched keenly,” a former defence officer opines.

Given the expectations that a large infusion of funds would come into the sector to prepare armed forces for the new two front challenge and the ‘Atmanirbhar Bharat’ in the field of Defence manufacture with coming up of two Defence Industrial Corridor (DIC) and aim of achieving USD 5 Billion Defence equipment exports by 2025; the outlay seems to be insufficient.

Though no mention was made about the allocation for Defence in the budget speech, the budget related documents indicate Rs 4, 78,196 crore for defence expenditure.

Also read| Check Union Budget 2021 Live Updates here: 

Based on the budget documents, for the armed forces modernisation alone under the capital expenditure head, Rs 1,35,061 crore and under the revenue side expenditure has been pegged at Rs 2,32,047 crore for the next fiscal.

And, this time the pension-related expenditure has come down to Rs 1,15,850 crore for the next year from the current year’s revised estimates of Rs 1,25,000 crore.

Last year …

The defence budgetary estimate was of Rs 323,053 crore till March 2021.

Expert View

According to Brig Akhelesh Bhargava (Retd), “At the face of it, there has been a marginal hike in defence component from Rs 4.71 Lakh Crore in 2020-2021 to Rs 4.78 Lakh Crore in 2021-2022; this includes pension bill. The pension bill has been estimated at Rs 1.16 Lakhs Crore down from Rs 1.33 Lakh Crore in the Revised Estimates (RE); considerably lower than expected. The defence personnel may expect implementation of certain policies as announced by Chief of Defence Staff (CDS) earlier or the Government may curtail part of OROP revision.”

“Net of pension the Defence budget stands at Rs 3.62 Lakh Crore in 2021-2022 as compared to Rs 3.37 Lakh Crore in 2020-2021; an increase of 7.4 percent. The capital outlay for the armed forces has gone up from Rs 1.14Lakh crore in 2020-2021 to Rs 1.35 Lakh crore this year; an increase of 18 percent. There has been a significant jump in the capital acquisition budget this time around. This is expected to push through several critical purchases. Due to China face-off and the emerging situation, there were many emergent procurements including the fast forward delivery of the fighter jets Rafale, `S-400, advanced Drones, high altitude clothing, modern small arms, munition, accelerated development of indigenous missile systems, etc,” the Indian Army veteran says.

In conclusion Brig Bhargava he says, “Besides, the order to Defence Public Sector Undertaking (DPSUs) for Tejas, Frigates and Submarines, Surface to Air, Air to Air, Air to Surface and Surface to Surface missiles which have been tested and ready for induction; require huge input cost. The outlay as it stands will not suffice for the same. The CDS will have his hands full in trying to do the balancing act.”

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