10% hike in Defence Budget, no mention in Fin Min’s speech

While the defence budget was on Monday increased by a feeble 9.76 per cent to Rs 2.58 lakh crore for the next year as compared to the revised estimates of Rs 2.33 lakh crore for 2015-16, this despite military pensions skyrocketing to Rs 82,000 crore, primarily due to the One Rank One Pension scheme.

In fact, the minister said in his budgetary speech: “The next financial year 2016-17 will cast an additional burden on account of the recommendations of the 7th Central Pay Commission and the implementation of Defence OROP. The government, therefore, has to prioritise its expenditure.” However, Jaitley said the focus of the ‘Make in India’ initiative will also be on defence production.

The capital outlay for the three services, for modernisation, stood at Rs 78,586.68 crore. The defence budget accounts for nearly 17.2 per cent of the total central government expenditure for the year 2016-17 which is Rs 19.78 lakh crore. 

This includes the pension budget along with the defence budget. The highest jump has been in the pension expenses. While the revised estimate for the current fiscal was Rs 60,238 crore, it has jumped to Rs 82,332.66 crore for the coming financial year.

In comparison, there has been a marginal increase of Rs 4287.07 crore in the capital expenditure of the three services which are in the process of modernising their equipment.  One reason for small hike could be that the Defence Ministry was unable to utilise the full capital budget for the current fiscal.