Budget 2021: Finance Minister skips mention of Defence in speech; fine print shows sector received 7.4% hike from last year


Excluding the pension outgo, the allocation in the Union Budget for the armed forces stands at Rs 3.62 lakh crore. This means that the defence forces received an overall hike of around 7.4% over last year as Rs 3.62 lakh crore were provided to them excluding pensions over Rs 3.37 lakh crores last year.

Out of total allocation, Rs 1.35 lakh crore has been set aside for capital outlay to purchase new weapons, aircraft, warships and other military hardware, according to the Union Budget presented in Lok Sabha by Finance Minister Nirmala Sitharaman.

The capital outlay in the defence budget 2020-21 was Rs 1.13 lakh crore. Therefore, the defence forces received more than 18% hike over last year in capital outlay.

The total revenue expenditure, which includes expenses on payment of salaries and maintenance of establishments, has been pegged at Rs 3.37 lakh crore.

The total revenue expenditure included Rs 1.15 lakh crore for payment of pensions.

However, the budget documents also revealed that the Defence Ministry spent an extra amount of Rs 20,776 crore for buying new weapon systems and spares for the armed forces in the present fiscal over and above the funds allocated for the purpose.

The additional Rs 20,776 crore has been spent on buying weapons and other spares under the special financial powers given to services under emergency and other provisions.

The money has been used to acquire equipment like the Spice-2000 bombs, Spike anti-tank guided missiles, SiG Sauer assault rifles, Excalibur ammunition, multiple types of aircraft spares from Russia along with the ammunition for tanks and fighter jets.

Earlier, several critiques had been raised since Finance Minister Nirmala Sitharaman made no mention of Defence in the Budget. Many considered it a key oversight amid the burgeoning border crisis with China.

In the 2021-22 Union Budget, the Defence Ministry has been allocated Rs 4,78,195.62 crore.Rs 1.15 lakh crore have also been allocated for defence pensions which are disbursed to both military and civilians who have worked for defence Ministry. Last year, the government had allocated Rs 1.33 lakh crore for the defence pensions.

The savings of around Rs 18,000 crore can be seen in terms of defence pensions as the government now seems to be determined with the proposals of enhancing retirement age for defence personnel.The proposals mooted by Chief of Defence Staff General Bipin Rawat have proposed enhancing the retirement age of both officers at different ranks by around one year to three years.

Among jawans, the service extension can be of more than 15 years in some cases.

(With inputs from agencies)