Group Captain Murli Menon (Retd)
Defence Analyst
It is a long-established, desirable criterion in Indian economic planning that our yearly defence budget expenditure approximates to at least 3% of our Gross Domestic Product (GDP). But this has remained wishful thinking, more so in times of relatively higher level of national threat perception as experienced recently, indeed continuously being on a downward vector over the past five years specifically. In the current fiscal, after the dramatic 23.9% contraction in our economy during April-June 2020 due to the Covid-induced lockdown , defence spending as a percentage of GDP would albeit go up to 2% from the 1.6-odd percentile of the previous five years. This, of course, is a deceptive indicator, effectively not providing enough funds for defence modernisation. Taking the example of the IAF which tends to have capital-intensive procurements, its share of the national budget has varied from 7.4% in 2007-08 to 18.20% in 2017-18, the defence budget varying from $22 billion to $56.9 billion over these years. This year, it is expected to be of the order of 30%.