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Wednesday, June 29, 2022

Budget 2022: Armed Forces get 10% hike in capital outlay for modernisation

If compared to the Rs 1.35 lakh crore outlay in the Budget Estimates from 2021-2022, the jump becomes even more pronounced, at nearly 13 per cent.

Written by Krishn Kaushik | New Delhi |
Updated: February 1, 2022 8:01:00 pm
The jump of 9.74 per cent over the revised estimates, which stood Rs. 1.39 lakh crore in 2021-2022, is significant compared to the 0.4 per cent rise that was seen comparing the same figures for the previous year.

The government has increased its defence capital outlay by nearly 10 per cent from last year’s Revised Estimates to Rs 1.52 lakh crore, boosting the Armed Forces’ push for procuring modern equipment.

If compared to the Rs 1.35 lakh crore outlay in the Budget Estimates from 2021-2022, the jump becomes even more pronounced, at nearly 13 per cent.

The increased allocation comes at a time when the Army, Navy and Air Force are in the process of procuring new equipment including submarines, fighter jets, tanks, artillery guns and drones.

Of the total capital outlay, Rs 1.24 lakh crore is for capital acquisition, while the rest is for other capital expenditure.

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The jump of 9.74 per cent over the Revised Estimates, which stood at Rs 1.39 lakh crore in 2021-2022, is significant compared to the 0.4 per cent rise that was seen the previous year.

There is also a marginal drop in the share of the overall defence budget in the total budget. This year, the defence budget stands at Rs 5.25 lakh crore, which is 13.3 per cent of the Rs 39.45-lakh crore budget. The share last year was 13.73 per cent.

The defence budget this year is 9.8 per cent more than the Rs. 4.78 lakh crore allocated last year. Compared to last year’s Revised Estimates of Rs 5.03 lakh crore, the growth stands at 4.4 per cent.

However, as has been the case, the revenue component of the budget, of which pensions is a huge cost, continues to be more than the capital outlay.

The total revenue component this year is Rs 3.6 lakh crore, of which pensions account for Rs 1.19 lakh crore. The pension bill is higher than last year’s Budget as well as Revised Estimates.

The government had allocated almost Rs. 1.16 lakh crore last year, while the Revised Estimates stood close to Rs. 1.17 lakh crore. In 2020-2021, the pension bill had been even higher, at Rs 1.28 lakh crore.

Pensions still account for just under a quarter of the total defence budget, a concern that governments have been trying to work on over the years.

Between the forces, when it comes to comparing the Budget Estimates from last year, the Navy has got the highest jump. Compared to the revised estimates, the widest gap is for the Army. The reason is that the Army’s Revised Estimates are considerably lower compared to the Budget Estimates, which is the reverse for the Navy.

The Navy was allocated Rs 33,254 crore in the budget, while the Revised Estimates went up to Rs 46,022 crore.

It has been allocated Rs. 47,591 crore this year, which is 43 per cent more than the Budget Estimates from last year, but only 3.4 per cent more than the Revised Estimates.

The Navy was allocated Rs 33,254 crore in the budget, while the Revised Estimates went up to Rs 46,022 crore.

It has been allocated Rs. 47,591 crore this year, which is 43 per cent more than the Budget Estimates from last year, but only 3.4 per cent more than the Revised Estimates.

The Navy is preparing to roll out a Rs 43,000-crore project to build six conventional submarines in India, and is pushing for building a second aircraft carrier. The first one, Vikrant, is expected to be commissioned this year.

The hike for Navy’s budget, the Defence Ministry said in a statement, has been done “underlining the importance of overall maritime security,” and is “aimed at acquisition of new platforms, creation of [Operational] and Strategic Infrastructure, bridging of critical capability gaps and building a credible maritime force for the future.”

For the Army, the allocation of Rs 32,015 crore is lower than the Budget Estimate of Rs 36,482 crore in 2021-2022. However, the Revised Estimates for the Army for last year stood only at Rs 25,377 crore. While, the jump over the Revised Estimate for the Army is 26 per cent, but when it comes to Budget Estimates, there is an actual reduction of more than 12 per cent.

Pushed by the military standoff in eastern Ladakh with China, the Army has been forced to upgrade its infrastructure along the entire 3,488 km-long boundary with the northern neighbour, along with building new surveillance, army aviation, billeting and other structures.

The Air Force, which has the largest capital outlay among the forces, has seen a stable though marginal growth, as it tries to phase out its ageing aircraft with modern fighter jets, both produced within the country and from outside.

It has been allocated Rs 55,587 crore this year, which is 7.2 per cent higher than last year’s revised estimates at Rs 51,831 crore, but just 4.5 per cent over the budgeted estimates of Rs 53,215 crore last year.

In a boost to border infrastructure and coastal security, capital budgets of the Border Roads Organisation and the Coast Guard have also seen major hikes. BRO’s capital budget has jumped by 40 per cent, from Rs 2,500 crore last year to Rs 3,500 crore, while the Coast Guard has seen a 60 per cent enhancement, from Rs 2,650 crore in 2021-2022 to Rs 4,246 crore this year.

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