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Security Trends South Asia » India Defence » Defence Budget 201112 Misplaced Euphoria

Mar 2, 2011

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Defence Budget 2011–12 –  Misplaced Euphoria

India’s allocation for Defence for 2011-12 is Rs.164, 415.19 Crore (Rs.1.64 trillion/$36 billion) an increase of Rs.17, 071 Crore or 11.59 percent over 2010-11 budgetary estimates of Rs.147, 344 Crore, and an 8.47 percent increase from revised estimates of Rs.151, 582 Crore.

The Capital outlay that is spending on permanent assets including equipment modernisation is Rs.69, 199 Crore. Approximately 80 percent of this amount is likely to be spent on weapons acquisition over the next year. The increase is 15.33 percent from the 2010-11 capital outlay of Rs.60, 000 Crore and 13.75 % hike from revised estimates at 60,833 Crore.

For the capital outlay, army would get Rs.18, 988.04 Crore, the navy Rs.5, 688.72 Crore, the naval fleet Rs.7, 320.02 Crore, the air force Rs.29, 722.74 Crore and defence research and development Rs.4, 628.30 Crore. Rs.118.32 Crore have been allotted in 2011-12 under capital outlay for 'prototype development under make procedure’; while in 2010-11 Rs.81.95 Crore were allocated for this purpose. Capital expenditure envisages outlay on several front line programmes including the 126 MMRCA, 197 light helicopters, 145 Ultra-light Howitzers, C-17 heavy-lift aircraft and numerous ongoing acquisitions such as Gorshkov aircraft carrier, Scorpene submarine, Su 30 MKI and Tejas LCA.

Under the Revenue head the total allotment is Rs.95, 216 Crore, a 9 percent hike from last year's Rs.87, 344 Crore. Of this Rs.64, 251.55 Crore go to the army, Rs.10, 589.06 Crore to the navy, Rs.15927.95 Crore to the air force and Rs.5, 624.81 Crore to defence research and development.

The increase is generally in line with the trend of defence budgets in the past though in the previous year the increase was only 3.9 percent while in 2009-10 it was 34 percent primarily to cater for hike in pay and allowances of personnel due to award of the Sixth Pay Commission. As a percentage share of central government outlay of Rs.1,257,729 Crore envisaged for 2011-12 it is approximately 13.07 percent though as a percentage of GDP it has fallen below 2 percent.

Defence Minister A.K. Antony was happy stating, 'We welcome the budget. On the whole, it is a positive and good budget. Our concerns have by and large been addressed. The finance minister has also said that should there be any fresh requirement, it will be met without any difficulties.' The Defence Minister has made  a record of sorts with his Ministry for the first time demanding and spending more on the capital account than that was allotted in 2009-10 had seen surrender of Rs 5539 Crore. The efficiency of defence expenditure however is a different matter as there are many strictures on this by the Comptroller and Auditor General and the Public Accounts Committee of the Parliament.

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