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 def
In a situation of heavy pressure on the economy, while also confronting an intrusion by Chinese troops on the border in Ladakh, the government has kept the defence budget at approximately the same level as the current year, allocating Rs 4.78 trillion for 2021-22. The revised estimates for 2020-21 indicate that the military has spent Rs 4.84 trillion this year, a significantly higher amount than what was allocated in February 2020. The reason for this is learnt to be the emergency procurement of arms and ammunition that was triggered by the Chinese intrusions into Ladakh last April. Against Rs 1.18 trillion allocated for capital spending in the current year, the government spent Rs 1.37 trillion – almost Rs 20,000 crore extra.