Budget 2019: Finance Miniter Arun Jaitley faces tough task of boosting defence

When Finance Minister Arun Jaitley will be present budget 2019, ahead of this year's general election, allocation for defence would be a crucial aspect. Last year, the defence forces were not fully satisfied with the marginal increase of funds. The Army had also claimed that it was falling short of funds for its 25 'Make in India' projects. According to a report by DNA, Army Vice Chief Lt General Sarath Chand had raised these points before a parliamentary standing committee on defence in March 2018. Chand had told the panel that the budget allocation for 2018-19 had "dashed the hopes" of the Army and the marginal increase was barely enough to meet inflation as 68% of the force's equipment falls in the "vintage category".

The Vice Chief also told the panel that the allocation of Rs 21,338 crore for modernisation of the army was not enough as it was below the committed payments of Rs 29,033 crore. This puts the spotlight on Finance Minister Jaitley who now faces a daunting task as higher defence allocation would be expected from him to meet the challenged posed by China as well as Pakistan with their aggressive border policies.  

In the Budget 2018, defence got the smallest chunk of 12.22 per cent of the total budget outlay in the last two decades. This was against the expectations as India's defence budget is now said to be the fourth largest in the world after US, China and UK. 

Notably, a steady decline has been witnessed from 3.18 per cent of GDP spent on defence in 1988 to nearly 1.6 per cent now against a global standard of 2-2.5 per cent. This comes at a time when China is spending 2.1 per cent while Pakistan is allocating 2.36 per cent of its GDP. 

The upcoming budget may probably correct the skewed defence allocation for the mammoth 1.5 million Indian Army, which is the third-largest in the world. The army, which needs to be well-equipped and modernised, can see beginning through the filling up of as many 11,000 officers post lying vacant. 

The army also needs budget boost as 83 per cent of the overall defence budget is said to be incurred in paying manpower costs that include pay and allowances of the personnel. This situation has therefore left little scope for modernisation and capital expenditure. 

Under-utilisation of funds has also been witnessed in India’s defence budget, because in the last couple of years nearly Rs 7,000 crore fund could not be utilised.