Indian Defence

In Depth Analysis: Indian Defence Budget 2021

Hello Defence Lovers! In this article, we are going to discuss a very important topic- the Defence Budget 2021. We are going to analyse how much and where the government plans to spend over the next year.

Defence Budget 2021-22 In A Nutshell

  • The overall defence expenditure for the fiscal year 2021-2022 will be ₹ 4,78,196 crore.
  • There is an overall 1.4% hike in the budget
  • The defence Budget for the last fiscal year was ₹ 4,71,378 crore
  • ₹ 1.35 lakh crore has been allocated for Capital Expenditure.
  • There is a significant hike of 19% in capital expenditure.
  • Total revenue expenditure ₹ 3.37 lakh crore.
  • ₹ 1.15 lakh crore as defence pensions for retired military and civilian personnel
  • Capital expenditure of ₹ 36,481 crores has been granted to the army
  • Capital expenditure of ₹ 33,253 crores has been granted to the navy
  • Capital expenditure of ₹ 53,214 crores has been granted to the airforce

Data source: India Today

Overall Defence Budget

India is one of the top 5 largest spending countries when it comes to defense. This year the Government of India has allocated ₹ 4,78,196 crore. The majority of this budget goes into maintenance and paying salaries and pensions. There is an overall 1.4% hike in the budget which is roughly Rs 7,000 crores.

Revenue Expenditure

The total revenue expenditure, which includes expenses on payment of salaries and maintenance of establishments and existing equipment, is ₹ 3.37 lakh crore. it 71% of the entire defence budget. The total revenue expenditure also includes ₹ 1.15 lakh crore for the payment of pensions.

Capital Expenditure

Note: Data is in Crores

The Capital Expenditure which is actually the fund allocated for the procurement of new equipment, modernization, and other operational expenses, is ₹ 1.35 lakh crore. It is roughly 29% of the total defence expenditure.

“Nearly 20 percent increase in Capital Defence Budget is positive. Hope we will not see an overspend on the Revenue and Pensions.”

former Chief of Army Staff Gen (retd) V P Malik

There is an increase of Rs 20,776 crore from the defence budget of the previous year. The increase is almost 19%, which is in fact the highest increase in the capital expenditure in the last 15 years. A series of emergency procurements India made from countries like the US, France, Russia and Israel account for the increase. The procurements made include missiles, precision-guided munitions, drones, assault rifles and specialized winter clothing and equipment.

Distribution Of The Capital Expenditure

Out of total allocation in the defence Budget, ₹ 1.35 lakh crore has been set aside for capital outlay to purchase new weapons, aircraft, warships and other military hardware.

The Indian Army has been allocated capital expenditure of₹ 36,481 crores as against ₹ 33,213 crores in FY 2020-21, as per the revised estimates.

The allocation made to the Indian Navy for capital expenditure is ₹ 33,253 crore which was ₹ 37,542 crores in the FY 2020-21.

The budgetary capital outlay for the Indian Air Force for 2020-21 was ₹ 43,281.91 crore but the revised estimate put the figure at ₹ 55,055 crores. This increment in the budget is for procuring new aircraft which include Rafale, Chinook, Apache, LCH and Tejas.

Both Army and airforce have received a significant increment whereas Navy has witnessed budget cuts. This was however necessary as the priority of Army and Airforce should be higher in the present situation where India is still in a year-long Standoff with Chian at Ladakh.

Conclusion

Though there is only a slight increase in the overall defence budget, the significant increase in the capital expenditure would help Indian forces to counter China in Ladakh.

China’s incursions in Ladakh and the ongoing standoff has highlighted the urgent and long-term need to prioritise defence. It has compelled the government to shift its central focus of military planning on China, from Pakistan. This need for prioritisation came even as the pandemic caused a drop in both economic activity and government revenue. Given this backdrop, the government had a challenging task on its hands.

JAI HIND

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Sheershoo Deb

I am a defense aspirant preparing to be an officer in the prestigious Indian armed forces. Earning the prestigious blue uniform is my dream.

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