India's defence budget needs to match strategic expectations
India's defence budget has been hardest hit, as the government scrambled to cut costs given the bleak economic growth of five percent -- the lowest in a decade. The cut came also against the backdrop of a history of under-utilisation of allocation by the defence ministry and the political hesitancy to conclude deals.
Unveiling the national budget for the next fiscal last Thursday, Finance Minister P. Chidambaram proposed a defence spending of Rs.2.03 trillion ($37.45 billion). This is a 5.2-percent increase from 2012-13, when the budget stood at Rs.1.93 trillion. Since the allocation and utilisation may change in the course of the fiscal year, the revised estimates accord a more realistic estimate of funds outflow.
Accordingly, the budget hike, in real terms, amounts to Rs.251.68 billion ($4.57 billion) over the revised estimates of Rs.1.78 trillion for the fiscal ending March 31, which amounts to a 14-percent increase. In 2012-13, the increase had been 17 percent.
Figures also reveal that the defence ministry suffered a budget cut of over Rs.140 billion last year, a majority of which -- over Rs.100 billion -- had been marked for procurement of new defence hardware.
India's annualised inflation rate of around 6 percent implies that the military has actually gained little from this year's increase. The U.S. defence expenditure amounted to $500 billion last year and China's was $110 billion. In comparison, India's defence budget of $38 billion is humble and barely 1.79 percent of the country's gross domestic product (GDP). This is a record low for India in at least three decades, with the figure dropping considerably from 3.16 percent of the GDP in 1987.
The water level of the Yamuna river has crossed the danger mark in Delhi, increasing the threat of flood. Locals are gearing to face the crisis as the rains are at least twice as heavy as usual in northwest and central parts of India.
Date 18-06-13, Duration 1:02, Views 1245