Budget 2021-22: Budgetary Push To Defence Sector Of India

by Shatakshi Gupta

 This time the defence budget has been increased marginally amid the continuing impasse from China. A budget outlay of Rs4.78 lakh crore has announced kept for the next financial year (2021-22), which is 1.4% higher than the previous year. Last time, a budget of Rs4.71 lakh crore was made for defence.

Also read: Key Highlights Of The Budget 2021-22

The budget announcement receives different reactions of people regarding the defence budget. Rahul Gandhi wrote on social media, “China occupied Indian land and martyred our soldiers. PM celebrates Diwali with them for photo-op. Why did he not increase the defence budget for the soldiers? At the same time, the Defence minister, Rajnath Singh has praised the budget. He said that this time the capital budget has been increased by about 19%, which is the highest in the last 15 years. Now let’s have a look on this year’s defence budget .

The defence budget mainly consists of three parts. Revenue, Capital Expenditure and Pension.

Revenue: Increase of four thousand crores

This year the revenue (including civil) is 2.27 lakh crores. Whereas last year the figure was 2.23 lakh crores. This includes expenses such as defence staff salaries, construction of roads and bridges.

Capital expenditure: Rs 20,776 crore increase            

This year, capital expenditure has increased by around 19%. The Finance Minister has made a provision of Rs 1.35 lakh crore for it. Which was 1.13 lakh crore rupees last year. This is the most important part in terms of military. In this, things like weapons, ammunition, fighter planes are bought for the needs of the army and modernization. It is believed that the government has focused on the capital budget due to the ongoing tension with China.

Source: ANI News

However, in the revised estimates of last budget, about 22 thousand crores more were spent by the army on its arms and ammunition after the Galwan clash. If you add this amount, the total defence budget of the last time increases to Rs 1.34 lakh crore. In such a situation, the capital budget has  increased by only 0.4% this year.

Also read: No Major Tax Announcements In The New Budget

 Pension: 18 thousand crore rupees reduced

There are about 2.4 million ex-servicemen of the three defence forces. In this year’s defence budget, a provision of Rs 1.15 lakh crore has been made for pension.  Which was Rs 1.33 lakh crore in the last year’s budget, which means a shortfall of about 18 thousand crores. However, last year 18 thousand crore rupees were spent on pensioners as arrears. If we take it out, then the figure is almost equal. Experts also believe that the government is going to increase the retirement age of soldiers, so the budget for pension is kept low.

Source: ANI News
Allocation to 3 different forces

 This time the capital budget for the Army is 36481 crore, 33253 crore for the Navy and 53,214 crores for the Air Force. Whereas last year a budget provision of 33,474 was made for Army, 26,688 crore for Navy and 43,282 crores for Air Force. This year, more emphasis has been laid on the budget of Air Force and Navy.  Talking about modernization, there has been an increase of 26% for Navy, 25% for Air Force and 18% for Army.