Union Budget 2019: Size of budgetary allocation for defence reflects a country's ability to fund military activities

The defence outlay works out to just about 1.58 percent of the GDP for 2018-19, the lowest such figure since the 1962 war with China wherein it was 1.65 percent.

FP Research June 21, 2019 13:22:21 IST
Union Budget 2019: Size of budgetary allocation for defence reflects a country's ability to fund military activities
  • Some suggest that military expenditure is a boost to local economies besides safety against external aggression

  • According to Stockholm International Peace Research Institute, the US leads in defence spend in the world with about $648 billion

  • The defence outlay was about 1.58% of the GDP for 2018-19, the lowest such figure since the 1962 war with China

A Defence Budget or Military Budget is the amount of financial resources allocated by a government for raising and maintaining its armed forces and its personnel or other methods essential for defence purposes. The size of the Defence Budget also reflects the country's ability to fund military activities.

Though no country dares to ignore major budgetary allocation for its defence forces, there are two aspects for this too. Some suggest that military expenditure is a boost to local economies besides safety against external aggression. However, another argument that comes up against the allocation is that maintaining military expenditure is a drag on the development.

Union Budget 2019 Size of budgetary allocation for defence reflects a countrys ability to fund military activities

Representational Image. AFP

According to Stockholm International Peace Research Institute, the US leads in defence spend in the world with about $648 billion followed by China ($250 billion), Saudi Arabia ($67.6 billion and India ($66.5 billion).

For the financial year 2018-19, India's Defence Budget allocation was Rs 2.95 lakh crore, an increase of 7.81 percent over the previous year’s Rs 2.74 lakh crore allocation. This accounted for 12.10 percent of the total Central government's expenditure for the fiscal year 2018-19.

The defence outlay works out to just about 1.58 percent of the GDP for 2018-19, the lowest such figure since the 1962 war with China wherein it was 1.65 percent. Defence Budget as a percentage of GDP used to be above 1.8 percent till some years back.

In the interim Budget of 2019, the Defence Budget was hiked by 6.87 percent to Rs 3.18 lakh crore against last year's allocation of Rs 2.95 lakh crore, notwithstanding expectations of a major hike when China and Pakistan were bolstering their military capabilities.

After the Narendra Modi-led National Democratic Alliance (NDA) government took over, it decided to reduce ammunition imports and instead procure all ammunition requirements from domestic sources.

The defence ministry under its Make In India initiative started encouraging the private players to manufacture equipment for the country's defence sector. Previously, only state-owned Ordnance Factory Board (OFB) was permitted to produce ammunition and India's private sector was only allowed to manufacture parts of ammunition such as the shell or fuse.

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