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Budget 2019: Why modernisation of military will be on hold

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New Delhi, July 05: Finance Minister Nirmala Sitharaman will present her first budget today outlining the priorities of Prime Minister Narendra Modi in his second term after a massive election victory.

Defence forces have high hopes that implementation of some of the top-most manifesto promise will see the light of day as the Bharatiya Janata Party had centered its Lok Sabha election campaign on national security.

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman

Moreover, the newly appointed finance minister Nirmala Sitharaman is the former defence minister, the expectation of a special focus on the sector has increased.

FM Sitharaman to present Modi 2.0 govt's first Budget today

India's defence sector needs replacement of outdated equipment with modern weaponry.The armed forces will be vying for an increase in the budgetary allocation with its eye set on modernisation and upgradation projects to deal with challenging security aspects both within and outside India.

However, the government is likely to stick to a modest rise in defence spending in Budget because of tight government finances, news agency Reuters quoted officials as saying in a report earlier this week. That would further delay a long-planned military modernisation programme.

There is no doubt the defence budget has increased nearly doubled in the last five years. But the money was still not enough to upgrade the weapons because the lion's share of the allocation for the ministry of defence (MoD) goes into paying salaries and pensions.

The Indian army has the largest share in the defence budget followed by the Indian Air Force and the Navy.

Insufficient allocation

India's defence allocation of $44.7 billion is just 30 per cent of China's military expenditure of $151 billion and 7 per cent of the Defence expenditure of USA in 2018, according to the Global Firepower Index.

The US, China and the UK remain the top three defence spenders while India has the fourth largest military budget, followed by Saudi Arabia and Russia.

Vice Chief of Army Lt Gen Sarath Chand had said 68 per cent of the Armys equipment is in the vintage category, adding fund crunch will also impact the serviceability of the existing equipment and may even affect payment of instalments for past purchases.

Military experts say the allocation for defence budget was inadequate to modernise India's armed forces when they are having to deal with an increasingly assertive China on the northern frontier and Pakistan's continued hostilities along the western border.

Why Finance Minister poses with a briefcase on budget day and what's inside it!

Defense allocation in previous budgets

Belying expectations of a significant hike, the defence budget was increased by a mere 7.81% to Rs2.95 trillion against last year's Rs2.74 trillion. The allocation has been estimated at around 1.58% of the GDP and 12.10% of the total budget of Rs2,442,213 crore for 2018-19.

Out of total allocation of Rs 2,95,511 crore for defence budget, Rs 99,947 crore has been set aside for capital outlay to purchase of new weapons, aircraft, warships and other military hardware. The revenue expenditure which includes expenses on payment of salaries and maintenance of establishments has been pegged at Rs 1,95,947 crore.

The allocation has been estimated at around 1.58 per cent of the GDP while the overall defence budget is 12.10 per cent of the total budget of Rs 24,42,213 crore for 2018-19.

Last year, the hike in defence budget was 6.2% compared to allocation in 2016-17. The increase was 9.76% for 2016-17 compared to 2015-16.

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