India's defence budget hiked by 10 per cent

New Delhi: India's defence spending will for the first time ever cross the Rs 1 lakh crore mark with the Government on Friday announcing a ten per cent raise in the

allocation for the year 2008-09.

In a clear signal that there would be no let up in the ongoing mammoth modernisation drive of the armed forces, Finance Minister P Chidabaram said that the defence allocation for the coming year would be Rs 1,05,600 crore, a hike of ten per cent from last year's allocation of Rs 96,000 crore.

But in actual terms, the hike is 14.16 per cent as that of last year as the Defence Ministry could only spend Rs 92,500 crore, leaving a sum of Rs 3,500 crore unspent, apparently due to two major contracts for purchase of helicopters and 155 MM artillery guns not going through.

It was amply clear that the budget will focus on continuing upgradation of armaments with the allocation on capital outlay running into Rs 48,007 crore, a jack up of almost 23.3 per cent over last year's outlay of Rs 37,705 crore.

Capital estimates last year were Rs 41,922 crore of which the Defence Ministry only spent Rs 37,705 crore.

Though there was substantial hike in defence budget, India's defence spending continued to be below two per cent of the GDP far less as compared to Pakistan's five per cent and China's almost seven per cent.

Welcoming the increased budgetary allocation, Defence Minister A K Anthony said the "modernisation drive would continue full steam".

He said armed forces had been hit by resource crunch in 90's and now time had come to equip them with latest weapons and systems to ensure that country's borders are safe.

Antony said the modernisation would be across the board in all three services — Army, Navy and Air Force — as well as in country's strategic programmes like missiles.

Asked if the budgetary allocation was sufficient, he said "the Finance Minister has made it clear that if more funds are required, we will get them".