Modi Years and Budget: Allocated Funds Increased But Declined in Percentage Share of Total Budget for Defence

New Delhi: Finance Minister Piyush Goyal in his Budget speech on Friday allocated Rs 3.18 lakh crore ($44.7 billion) for the Defence sector of the country.

The Defence allocation is 11.45 per cent of the total budget 2019-20 (Interim) of Rs 27.84 lakh crore presented before the Parliament on Friday, which is a decline of 65 basis points (bps) from the previous budget. This is the first time that the Defence budget has crossed the Rs 3 lakh crore-mark.

"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," Goyal said in his speech.

However, Defence budget, although increasing in terms of total volume, has been declining for past four years as a percentage share of the total union budget.

For instance, in 2018-19, Rs 2.95 lakh crore was earmarked for defence services. This made up for 12.1 per cent of the total budget of Rs 24.42 lakh crore for the year. A year before that in 2017-18 Defence budget of Rs 2.74 lakh crore accounted for 12.76 per cent of the total Rs 21.46 lakh crore worth of union budget.

Similarly, for the year 2016-17, Defence budget was 13 per cent of the total union budget, while it was 14.3 per cent of the total budget in 2015-16.

However, due to an overall increase in the amount being set-aside for the sector, the defence allocations for 2019-20 denote a 7.92 per cent over the Budget Estimates (Rs 2,95,511.41 crores) and 6.87 per cent over the Revised Estimates (2,98,418.71 crores), for the financial year 2018-19.

Goyal also claimed that under the NDA, the government has disbursed over Rs 35,000 crore for the implementation of One Rank One Pension (OROP) scheme.

"In our election manifesto, we had promised to implement One Rank One Pension (OROP). This was pending for the last 40 years and has been resolved by us. 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," Goyal said.

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.