The defence budget remained unchanged at Rs 3.18 lakh crore, the amount set aside in the interim budget in February, notwithstanding expectations of steep hike in resources to modernise the armed forces and procure critical military platforms.
The allocation made in the Union Budget is an increase of6.87 per cent over revised estimates of Rs 2.98 lakh crore given in 2018-19.
The allocation of Rs 3.18 lakh crore has been estimated ataround 1.6 per cent of the GDP which, according to experts, is lowest since the1962 war with China.
In the interim budget presented on February 1, the defencebudget was pegged at Rs 3.18 lakh crore and there was no change in theallocation.
In a significant move, import of defence equipment notmanufactured in India has been exempted from basic customs duty by FinanceMinister Nirmala Sitharaman.
She said defence has an immediate requirement ofmodernisation and it is a “national priority”.
“This will have an impact of augmenting the defencebudget by approximately Rs 25,000 crore on account of savings in expenditure oncustoms duty over the next five years,” the defence ministry said.
In the wake of the Balakot strikes and China aggressivelymodernising its armed forces, there were expectations from the three servicesallocation will be significantly hiked by Sitharaman, who was defence ministerin the previous government.
“The capital allocation is not adequate to modernisethe armed forces. Everyone was expecting a significant hike in allocation, butunfortunately it did not happen,” said Laxman Behera of Institute of Defence Studies and Analysis.
Out of the total allocation, Rs 1,08,248 crore has been setaside for capital outlay to purchase new weapons, platforms and militaryhardware.The revenue expenditure which includes expenseson payment of salaries and maintenance of establishments has been pegged at Rs2,10,682 crore as against Rs 1,88,118 crore for 2018-19.