The Finance Minister of India Nirmala Sitharaman presented the Union Budget of India today for the Financial Year 2021-22. Amid border rows with China, Government allocated ₹1,35,060.72 crore for Defence Capital expenditure which is up by 18.75 percent. Highest ever increase in capital outlay for Defence in last 15 years.
The budget allocated for Defence is ₹3,67,106 crore excluding pension which is around 7.4 percent up by last year. The total outlay budget allocated for the Defence Ministry is ₹4,78,195.62 crore compared to ₹4,71,378 crore last year.
Out of total Defence Budget, ₹1,35,060.72 crore has been allocated for weapons and modernisation in comparison to ₹1,13,734 crore last year. The Defence capital expenditures has seen a surge of ₹21,326 crore this year.
I specially thank PM& FM for increasing the defence budget to 4.78 lakh cr for FY21-22 which includes capital expenditure worth Rs 1.35 lakh crore. It is nearly19 percent increase in Defence capital expenditure. This is highest ever increase in capital outlay for defence in 15yrs
— Rajnath Singh (@rajnathsingh) February 1, 2021
₹2,32,046.93 has been slated for Revenue which is up by 8 percent compared to ₹2,29,999.69 crore last year.
Interestingly as per budget defence pensions expenditure gone down this year. Defence Pensions budgeted at ₹1,15,850 crore this year which reduced from ₹1,33,825 crore last year.
The capital expenditure for the Navy has been increased by 24.6% compared to last year’s budget announcement, for the Army its 12.6% and almost 23% increase in Indian Air Force capital expenditure.
Many believe that, if tensions with China continues, then actual defence capital expenditure in FY 2021-22 can exceed from the budgeted figure just like India spent ₹20,776 crore in unbudgeted, emergency requirements in FY 2020-21.
Overall it is a decent Defence Budget considering economic situation and ongoing standoff with China. Defence Capital Expenditure has seen a good hike of 18%.
Several weapons are pending to purchase for Armed Forces in coming years. Indigenous equipments like Light Combat Helicopter, Light Utility Helicopter, ATAGS is waiting for orders. MMRCA 2.0 for IAF is still pending, RFP for Project P75i for Indian Navy is also due to release.