Budget 2016: India's defence budget sees a hike of 9.76 %

India's defence budget outlay for the financial year 2016-17 was announced to be Rs2.58 lakh in the annual budget laid down in Parliament by finance minister Arun Jaitley on Monday.

While this amounts to a meagre hike of 1.16 percent on the basis of the budget estimates of 2015-16, but on being calculated against the revised estimates of the last fiscal which was Rs2.33 lakh crore, it comes around an increase of 9.76 percent.

The capital expenditure outlay for the defence services has been put at Rs78,586 crores as compared to the last year of Rs86, 894 crores. Even as the revised estimate for last financial year showed unused fund of Rs11,595 crore, another Rs6,700 crore of the expenditure budget remained unspent.

Another Rs82,000 crore was allocated towards pension funds, that goes mainly for the beneficiaries of the One Rank One Pension scheme, notified in last fiscal. An amount of Rs60,238 crore was the revised estimate under pensions, last financial year.

Adding the pension funds makes the total defence budget accounting for 2.2 percent of India's Gross Domestic Product (GDP) that still lags by 0.8 percent for India to be able to take on China militarily, according to experts.

India's defence budget share was 1.74% of country's GDP in 2015-16.

There were anxious moments in the Parliament on Monday since Jaitley didn't mention the defence outlay in his speech, which came as a break from the tradition in more than 15 years.