Union Government, on February 1, in its budget for the current financial year 2019-20, has allocated over Rs 3, 18, 000 crore for the defence needs excluding the defence pension. This is for the first time that the allocation for the defence has exceeded three lakh crore mark.
According to a Ministry of Defence (MoD) statement, “For Defence Pension, an amount of Rs. 1,12,079.57 crore has been provided in BE (Budget Estimates) 2019-20. Total Defence Allocation, including Defence Pension, accounts for 15.48 per cent of the total Central Government expenditure for the year 2019-20.”
“The allocation of Rs. 3,18,931.22 crore represents a growth of 7.93 per cent over Budget Estimates (2,95,511.41 crore) and 6.87 per cent over Revised Estimates (Rs. 2,98,418.72 crore), respectively for the financial year 2018-19,” it said.
Out of this allocation, Rs 2,10,682.42 crore is earmarked for the revenue part and rest Rs. 1,08,248.80 crore will go for capital expenditure which is 32.19 per cent of the total Central Government Capital Expenditure.
The capital expenditure includes all capital purchases for the MoD.
Minister of Defence, Nirmala Sitharaman, in a tweet, thanked Finance Minister Piyush Goyal and Prime Minister Narendra Modi for emphasising on the “importance of the defence forces- OROP and the modernisation of the armed forces given top priority.”
Chart 1: Defence Expenditure as a Percentage of GDP
Year Defence Expenditure GDP
2011–12 170913 8736329
2019-20 (BE) 305296 21007439
Percentage Growth 78.63 140.46
Table 3: Share of Pay & Allowances of Army, Navy and Air Force as a percentage of Defence Revenue Expenditure pre and post 7th CPC
2015-16 2019-20 (BE)
Defence Revenue Expenditure 145936 201902
P&A - Army, Navy & Air Force 82828 121252
Percentage 56.76 60.05
All amount in crore.