Budget 2017: Defence allocation up over 6.2% at Rs 2.74 lakh cr in 2017-18

New Delhi: The overall defence budget today saw an increase of a marginal 6.2 percent for the next fiscal at Rs 2.74 lakh crore from the current Rs 2.58 lakh crore, with the capital outlay to cover the modernisation programmes getting a hike of 10.05 percent.

File photo of army personnel. Reuters

File photo of army personnel. Reuters

The capital outlay for the three defence services for the purchase of new equipment, weapons, aircraft, warships and other military vehicles stood at Rs 86,488 crore for 2016-17 as compared to Rs 78,586 crore for this fiscal.

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

The money allocated for defence pensions was Rs 85,737 crore as compared to revised estimate of Rs 85,624 crore this fiscal.

"Rs 2,74,114 crore is allocated for defence expenditure, excluding pension. This includes Rs 86,000 crores for defence capital," Finance Minister Arun Jaitley said while presenting the Union Budget.

Welcoming the defence outlay, Minister of State for Defence Subhash Bhamre tweeted, "9.3% increase in capital outlay for Defence Ministry. Up to Rs 86,000 cr from Rs 78,000 cr last year. Welcome move: @arunjaitley".

The defence industry also welcomed the increased capital expenditure.

"The increased allocation towards capital expenditure in defence budget is a welcome move. It shows the government's commitment towards indigenisation. The increased spend by the government on capex will lead to trickle down effect and more work for SMEs. It will further help in defence and fleet modernisation. It will also boost Make in India in defence," Puneet Kaura, MD and CEO Samtel Avionics said.

However, Ankur Gupta-Vice President (Aerospace and Defence) at Ernst & Young India said that if one takes into account the depreciating Rupee and the imposition of customs duty on all defence imports, this increase may "not suffice to meet the modernisation requirements".

"The capital budget has increased by approximately 10 percent when compared to the budgetary estimates, but if we consider the impact of the depreciating Rupee and the
imposition of customs duty on all defence imports, this increase may not suffice to meet the modernisation requirements," he said.

Updated Date: Feb 01, 2017 18:48 PM

Also Watch

Social Media Star: Abhishek Bachchan, Varun Grover reveal how they handle selfies, trolls and broccoli
  • Monday, July 16, 2018 It's a Wrap: Soorma star Diljit Dosanjh and Hockey legend Sandeep Singh in conversation with Parul Sharma
  • Monday, July 16, 2018 Watch: Dalit man in Uttar Pradesh defies decades of prejudice by taking out baraat in Thakur-dominated Nizampur village
  • Monday, July 16, 2018 India's water crisis: After govt apathy, Odisha farmer carves out 3-km canal from hills to tackle scarcity in village
  • Sunday, July 15, 2018 Maurizio Sarri, named as new Chelsea manager, is owner Roman Abramovich's latest gamble in quest for 'perfect football'