Govt to hike defence budget

[black eagle]

Govt to hike defence budget

In the backdrop of evolving Asian security scenario, defence modernisation is poised to get a massive boost in the coming fiscal with the Budget likely to increase capital acquisition allocation by almost 25 per cent. Defence Ministry officials said that the Finance Ministry has agreed to a "significant jump" in the capital acquisition outlay to nearly Rs 56,000 crore in 2011-12 from revised provision of Rs 45,000 crore in the current fiscal.

The enhanced outlay is seen as being in sync with the defence spending by India's immediate neighbours, especially China which has been increasing its outlays by double digits over the last two decades.

However, most of the enhanced Budget — nearly Rs 35,000 crore — would go towards "committed liabilities of the past few years", said the officials. Besides, there would be new spending on big ticket items such as medium multi-role combat aircraft (MMRCA) and much delayed reconnaissance and surveillance helicopters.

India plans to spend Rs 46,000-crore for 126 MMRCA, the world's most advanced fighter aircraft, for Indian Air Force and more than Rs 60,000 crore for 197 advanced helicopters for IAF and the Indian Army. "Field trials have been completed for both products and only the government (Cabinet Committee on Security) approval remains," said the officials.

The enhanced outlay is also reflective of the Defence Ministry's past record in spending. After struggling during his initial years as the Defence Minister, A K Antony has been able to exhaust the Budget allocation for the second year in a row.

"We are reasonably confident that we will be able to place orders for the money allocated to us during the current fiscal," said a senior ministry official. Most of it, he said, has been tied up. "What remains is CCS approval for Akash missiles, C-17 Globemaster aircraft, Mirage-2000 upgrade and additional purchase of patrol vessels. These proposals are being dealt with at various levels and are likely to be cleared before March 31 (when the fiscal year ends)," he said.

 

[captonjohn]

Good move though, this should be done long time before.

 

[Yusuf]

25% jump is not very significant esp when seen from the point of percentage of GDP. Inflation will see most of this hike nullified. We need to get to 3% of GDP as far as defense spending goes. This is what many countries do. We have always been conservative with our defense spending, In fact our forces return surplus money every year as they don't full utilize all the money. we need to change all that.

 

[Ray]

The MOD should translate the money for goods!

Instead of sitting on its haunches and surrendering it at the end of the financial year or go into distress buy!

 

[thakur_ritesh]

25% jump is not very significant esp when seen from the point of percentage of GDP. Inflation will see most of this hike nullified. We need to get to 3% of GDP as far as defense spending goes. This is what many countries do. We have always been conservative with our defense spending, In fact our forces return surplus money every year as they don't full utilize all the money. we need to change all that.

mate, rather than gdp as a measure for defence expenditure, we need to base it on total budget out lay. with a tax to gdp ratio of a mere 10-11%, india can ill afford to spend 3% of gdp on defence expenditure.

NEW DELHI: India's revenue secretary Sunil Mitra said on Monday he expects Asia's third-largest economy's tax-to-GDP ratio to be marginally lower at 10.6 per cent in the current fiscal year to March, from the budget estimate of 10.8 per cent because of inflation.

http://economictimes.indiatimes.com...at-106-pc---secretary/articleshow/7352540.cms

The MOD should translate the money for goods!

Instead of sitting on its haunches and surrendering it at the end of the financial year or go into distress buy!

Sir,

my sense is, its a pretty well thought out strategy. when the fiscal deficit is seen going out of hand they curtail the capital expenditure and so we see the unused defence budegt and surrender of it, though we have one of the most unplanned capital expenditure and a possible check to it can be quarterly closing than yearly closing.

 

[gogbot]

25% jump is not very significant esp when seen from the point of percentage of GDP. Inflation will see most of this hike nullified. We need to get to 3% of GDP as far as defense spending goes. This is what many countries do. We have always been conservative with our defense spending,

We are still a developing nation , we can't loose all perspective.

In fact our forces return surplus money every year as they don't full utilize all the money. we need to change all that.

I am surprised you have not read the article properly

The enhanced outlay is also reflective of the Defence Ministry's past record in spending. After struggling during his initial years as the Defence Minister, A K Antony has been able to exhaust the Budget allocation for the second year in a row.

 

[captonjohn]

We are still a developing nation , we can't loose all perspective.

Definitely but we can't avoid our national security. Sometimes national security becomes top priority than anything specially when you are continuously facing incursion and hostile attitude by two strong neighbor countries as well as one of them have world's largest military force and have history to attack on you.

If we don't act now then we'll face a war ourself and nobody will be responsible for that except us.