Defence Budget 2020-21 Portends of Negative Growth

With low growth of 5.81 % from last years budget estimates counting inflation [CPI 3.3-3.7] and foreign currency fluctuations there are portends of negative growth.

The Defence Budget in India has now become an oxymoron, while being the largest head in the expenditure of the central government increase is marginal. This year too there is no surprise except that this may assume a negative spiral.

Defence Budget for 2020-21 is in negative territory if inflation is taken into account given the increase in the overall allocations is only a marginal 2.1 percent YOY from Revised  Estimates.

The Reserve Bank of India consumer price inflation forecast for the second half of 2019-20 is at 3.5-3.7%

Given that there is an import cost to India’s capital procurement the defence budget may now be seen to be in the negative.

Total Allocations for Defence Services is Rs 323053 Crore, Revenue Rs 209319.00 Crore and capital Rs 113734.00 Crore [SBE 19 AND 20]........................

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