New Delhi: Out of several sectors that failed to secure higher allocation of funds than the estimate pegged during the interim Budget, a key domain was: Defence.

Finance Minister Nirmala Sitharaman failed to loosen purse strings to fund modernisation of the armed forces in the Union Budget presented on Friday, as the allocation for defence remained on the lines of the interim Budget presented earlier this year as the outlay stood at Rs 3.18 lakh crore.

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Defence allocation did not find mention in her speech as she only announced exemption of customs duty on import of defence equipment not manufactured in the country and said that immediate modernisation and upgradation of armed forces was a national priority.

Experts soon claimed that the money allocated was not enough. “The Budget does not meet the financial needs of the 200-odd contracts signed. The modernisation needs impetus and the budget should have incentivised the indigenous capabilities and contributed more to Make in India,” said Lt. General Vinod Bhatia (retd.), emphasising on the need for expansion of defence manufacturing base.

“The interim Budget presented by Piyush Goyal in February had already given the allocation to the Defence Ministry for the entire year. The allocation made in the interim Budget was higher than last year’s budget which was around 8 per cent increase than last year’s Budget,” said Air Marshal S.B.P. Sinha (retd.).

Out of the Rs 3.18 lakh crore defence budget, the outlay for capital expenditure (for purchases of equipment) is Rs 1,08,249 crore. Therefore the remaining revenue will only suffice day-to-day running expenditure and sustaining costs like salaries and maintenance.

In addition, a bulk of the capital outlay will be invested in ‘committed liabilities’ or paying instalments for arms deals inked in earlier years- which means little to nothing will be left for fresh arms deals, if they were to be signed.

Defence personnel and experts have long been demanding at least 2.5 per cent of the GDP be spent to ‘deter China and Pakistan’, but with the Union Budget presented on Friday, all hopes of achieving this target have been dashed. The present budget for Defence stands at only 1.5 per cent of the projected GDP.

 

With IANS inputs