₹3 lakh crore for Defence in Interim Budget, sees decline in real terms

Updated - February 01, 2019 03:08 pm IST

Published - February 01, 2019 12:51 pm IST

Silhouette of special forces operators with weapons

Silhouette of special forces operators with weapons

The allocation for defence in this year’s interim crossed ₹3 lakh crore for the first time but is less than ₹5,000 crore compared to last year, representing the smallest increase year-on-year in recent times. Last year’s defence allocation was ₹2.95 lakh crore excluding pensions.

In real terms, the allocation represents a decline after factoring in inflation and currency fluctuation.

“Our defence budget has for the first time crossed ₹3 lakh crore for 2019-20... For securing our borders and to maintain preparedness of the highest order, if necessary additional funds will also be provided,” Finance Minister Piyush Goyal announced during the budget speech in the Parliament.

This is a worry some scenario as for the much needed military modernisation as several multi-billion dollar defence deals were signed in the last few years and several are in the pipeline.

For instance, last year then Vice Chief of Army Staff (VCOAS) Lt Gen Sarath Chand told the Parliamentary standing committee on defence the allocation under revenue stream for 2018-19 did not even cater to the limited liabilities.

Mr. Goyal also took credit for implementing the long pending One Rank One Pension (OROP) for military personnel. Taking a dig at Congress for failing to implement OROP, Mr. Goyal said previous governments had announced in in three budgets but sanctioned a mere ₹500 crore in the interim budget of 2014-15.

“In contrast we have already disbursed over ₹35,000 crore after implementing the scheme in true spirit,” he stated.

Referring to other allowances for military personnel, Mr. Goyal said  the government has also “substantially hiked” the Military Service Pay (MSP) of all service personnel and special allowances to Naval and Air Force personal deployed in high risk areas.

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