BUDGET PINCER

China’s military deployment along the northern frontiers leads to a spike in India’s defense capital budget, but the bigger challenge will be prioritising acquisitions to modernise India’s military

- SANDEEP UNNITHAN

SINCE THE BEGINNING OF THE BORDER stand-off in May last year, the military burden imposed by China on India has cost the nation roughly Rs 20,766 crore. India’s armed forces have had to buy additional weapons and military hardware after China suddenly deployed its military along the Line of Actual Control (LAC) last April.

This 20 per cent increase in capital expenditure—the difference between the budgetary estimate (what the government allocated) and the revised estimate (what it actually spent)—was one of the highlights of the budget presented by Union finance minister Nirmala Sitharaman on February 1. While this might have been a one-time emergency spend, the trend is set to continue. The budget flattened defence expenditure—the 1.4 per cent hike was the lowest in several years—but boosted capital expenditure for the armed forces to spend on buying new warships, tanks and fighter jets and building border roads and bridges. Last year, it spent Rs 1.13 lakh crore. This year, it will spend Rs 1.35 lakh crore on buying new military hardware.

The overall stagnation in the defence budget this year is worrying but understandable given the enormous pressure on the government. Defence accounts for close to 10 per cent of the Union budget and is the second-largest expenditure after debt servicing.

1.4% HIKE IN DEFENCE BUDGET, THE LOWEST IN SEVERAL YEARS

₹4.7 LAKH CRORE TOTAL DEFENCE BUDGET