Defence Industry

Defence Budget 2019: A positive Increase
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Issue Net Edition | Date : 01 Feb , 2019

Acting Finance Minister of India, Mr Piyush Goyal presented an interim budget in this election year of 2019. Many experts had predicted a low key defence budget for the FY 19-20. There was seen a marked jump of 5000 crores in defence budget allocation this year, however far below from desired levels.

A total of 3.05 lakh crores were allocated for defence as against 2,95 lakh crores in the last FY 18-19. This accounts for a increase of 3.39 % then the previous FY, thus pitching it at roughly 1.64 % of the projected GDP. As per the presentation made by the Vice Chief to Parliamentary Committee, Lt Gen Sharad Chand had expressed a need for a defence budget, which is pitched at 2 to 2.5% of the GDP. This is essential for rapid modernization of India’s armed forces under the existing security threat perspective.

A total of Rs. 3,05,296 crore have been provided in the Budget Estimates for 2019-20, compared to Rs. 2,82,733 crore provided in 2018-19 Budget Estimates. The figures were revised to Rs. 2,85,423 crore in the Revised Estimates of 2018-19.

While presenting the Interim Budget 2019-20 in Parliament today the Union Minister for Finance, Corporate Affairs, Railways and Coal Sh. Piyush Goyal said “Our Defence Budget will be crossing Rs.3,00,000 crore for the first time in 2019-20. For securing our borders and to maintain preparedness of the highest order, if necessary, additional funds would be provided.”

 On the issue of strengthening Defence and National Security, the Interim Budget 2019-20 states that our soldiers protect our borders in tough conditions and they are our pride and honour. The Finance Minister Sh. Goyal said that due care has been taken of their honour.

He said that the issue of One Rank One Pension (OROP) which was pending for the last forty years has been resolved. He said “The previous Governments announced it in three budgets but sanctioned a mere Rs.500 crore in 2014-15 Interim Budget; in contrast we have already disbursed over Rs.35,000 crore after implementing the Scheme in its’ true spirit.

The Government also announced substantial hike in the Military Service Pay (MSP) of all service personnel and special allowances given to Naval and Air Force personnel deployed in high risk duties.”

This year the total capital allocation of Rs 1,03,380.34 is an increaseby 9,398.21 crores from the previous FY 18-19, marking a 10% jump. Similarly the revenue allocation saw an increase of 5.5% with allocation of Rs1,98,485.76 in this Budget Estimate of 19-20.

Under the Miscellaneous head of the budget, which apart from Border Roads, Defence Estates, Jammu Kashmir Rifles and Armed Forces Tribunal, also accounts for capital allocation to Coast Guards, which is Rs 2,500 crores out of the total allocation of Rs 17,065.12 Crores.

The defence pension allocation also witnessed a 5% jump. A sum total of Rs 1,12,079.57 was earmarked for pensions in FY 19-20. This is a whooping 36% of the total defence budget of India.

A quick glance at the budget allocation under capital and revenue heads is as under:

Capital Budget breakdown

Revenue Budget breakdown

Though this Defence Budget falls short of the projected needs of India’s armed forces. However, an increase of 5000 crore than the previous budget is a positive sign for the ailing health of our overall defence capabilities.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Danvir Singh

Associate Editor, Indian Defence Review, former Commanding Officer, 9 Sikh LI and author of  book "Kashmir's Death Trap: Tales of Perfidy and Valour".

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