Budget 2018: Defence Allocation Up 7.8 % to Rs 2.95 Lakh Cr

Defence outlay estimate has been raised to Rs 2.95 lakh crore in 2018-19 from Rs 2.74 lakh crore currently.

India’s Border Security Force (BSF) soldiers on patrol.

(Photo: Reuters)

Finance Minister Arun Jaitley did not mention the budget allocation for the defence sector in his Union Budget 2018-19 speech on 1 February, Thursday. However, the government has decided to increase the military spending this year.

Defence outlay estimate is raised to Rs 2.95 lakh crore in 2018-19 from Rs 2.74 lakh crore in the current year. This marks a 7.8 percent rise in defence spending estimates.

Out of the 2.95 lakh crore defence Budget, 1.85 lakh crore has been allocated to revenue expenditures which include salaries, training and general services. The amount of around 93 thousand crore, allocated for capital expenditure, includes modernisation related expenses, while, 16 thousand crore is earmarked for miscellaneous expenses.

The Centre has allotted 1.08 lakh crore to defence pensions which is over and above the other expenses. This is 26.6 percent above last year’s figure.

The figures indicate that India's military spending has slipped to 1.57 percent of its estimated Gross Domestic Product (GDP) in Budget 2018-19. In last year’s Budget it was 1.62 percent of the country’s GDP.

Arun Jaitley did not give the figures in his speech, but said that the government will develop two defence industrial production corridors and bring out an industry-friendly military production policy to promote the defence industry.

The finance minister appreciated the role of the armed forces in meeting challenges on the country's borders as well as in managing the internal security environment, both in Jammu and Kashmir, and the North East.

The government will take measures to develop two defence industrial production corridors in the country. Rohtang tunnel has been completed to provide all weather connectivity to the Ladakh region. Contract for construction of Zozila Pass tunnel of more than 14 kilometer is progressing well. I now propose to take up construction of tunnel under Sela Pass.

Finance Minister Arun Jaitley

He said a number of initiatives had been taken to develop and nurture India's intrinsic defence production capability to make the nation self-reliant on its defence needs.

The minister said private investment in defence production had been opened up, including liberalising foreign direct investment.

(With inputs from PTI)