Description of Defence Budget

2017-18

CONTENTS. Preface.

History of Defence Expenditure .

Overview of Defence Budget 2017-18.

Share of Defence Services in Defence Budget 2017-18.

Budget Analysis.

Modernization Budget of Armed forces.

Comparative Statistics of Defence Budget 2016-17 & 2017-18 .

Conclusion.

PREFACE…• Budgets are the core heart of the govt. budgets are

the initial plan outs for the well being and smooth running of a community or an human herd.

• Among those budget plans Defence budget plays an efficient role. Defence budget can be said as, “the portion of overall Union budget , allocated for the funding of the Indian Armed Forces”.

• Defence budget are crucial and only dedicated to the hero's of our country savers.

GRAPHICAL REPRESENTATION TO THE HISTORY OF DEFENCE BUDGET.

Over View of 2017-18 Defence Budget Defence budget is hiked to 11% over last year.

Defence expenditure excluding pension is set at ₹2.74 lakh crore.

The allocation is about 12.78% of total government expenditure of ₹21.74 lakh crore.

The capital acquisition component of the defence allocation for the coming fiscal is just over ₹86,400 crore, compared to about ₹78,500 crore last year. However, the Defence Ministry had returned close to ₹36,000 crore of the funds allocated to it for capital acquisition last year.

Budget Analysis…• Honorable Finance Minister Mr. Arun Jaitley, took a lead

in presenting the Union Budget of 2017 on 1st day of February 2017, to set out the government's policies for the next year. Defence budget is one among that.

• An outlay of ₹ 2.74 lakh crore has been proposed as budget estimates [BE] for the financial year 2017-18.

• The Defence outlay amounted to 12.77 per cent of the total budget.

• In 2016-17 The capital preferences for 3 defence services to purchase the new equipments, weapons, aircrafts, warships and other military vehicles stood at ₹ 86,488 crore. As compared to this fiscal year it is ₹ 78,586 crore.

• The money allocated for defence pension was ₹ 85,737 crore.

As compared to revised estimation it is ₹ 85,624 crore this fiscal year.

• Budget documents show that revised capital budget for this fiscal year is ₹ 71,700 crore, but it is not clear whether the Defence Ministry was unable to spend the remaining amount (₹ 6,886 crore) or whether any savings were done.

• The Defence Industry also welcomed the increased capital expenditure .

• The Government has made an allocation for the Make in India programmes and R&D, the capital expenditure has seen a decline from 34.7% to 33.0% of the defence budget.

• In between Defence budget, there are some small allocation of ₹ 44.63 crore for prototype development under ‘Make In India’ which has been recently revised by MoD.

2016-17 (BE) ( ₹ in Crore)

2016-17 (AE) ( ₹ in Crore)

2017-18 (BE) ( ₹ in Crore)

% Increase in 2017-18 (BE)over 2016-17 (BE)

Army* 21535 17812 20148 -6.4Navy 21323 18993 18749 -12.1

Air Force 27556 26216 30885 12.1Total 70414 63021 69783 -0.9

Modernization Budget of Armed forces

Note:* : Figures of Army are approximate.

2016-17 2017-18

Defence Budget (Rs. in Crore)

249099.0 262389.8

Growth of Defence Budget (%) 0.96 5.34

Revenue Expenditure (Rs. in Crore)

162759.0 175861

Growth of Revenue Expenditure (%)

6.98 8.05

Share of Revenue Expenditurein Defence Budget (%)

65.3 67.0

Capital Expenditure (Rs. in Crore) 86340.0 86528.7

Comparative Statistics of Defence Budget 2016-17 & 2017-18

Growth of Capital Expenditure (%) -8.7 0.22

Share of Capital Expenditurein Defence Budget (%)

34.7 33.0

Capital Acquisition (Rs. in Crore) 70000 69783*

Growth of Capital Acquisition (%) -9.4 -0.3

Share of Defence Budget in GDP (%) 1.65 1.56

Share of Defence Budget in Central Government Expenditure (%)

12.6 12.2

Defence Pension 82332.66 85740.00

MoD’s Budget (Rs. in Crore) 340921.98 359854.12

Growth in MoD’s Budget (%) 9.95 5.55

Share of MoD Budget in GDP (%) 2.26 2.14

Share of MoD Budget in Central Government Expenditure (%)

17.24 16.76

• The meager increase of 5 % in the official defence budget is grossly inadequate especially in view of the vast voids existing in military capability and the diminished and incremental effect on modernization and operational preparedness.

• There is a need to augment resources substantially, particularly under two critical heads of the defence budget – stores and capital procurement – which have come under severe pressure in the last several years with a huge negative consequence on India’s defence preparedness.

Conclusion

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