Budget 2012: Defence budget up by over 17%

Barely a week after China announced a whopping 11.2% jump in its military budget, India on Friday raised its defence expenditure by over 17% with acquisitions like 126 fighter aircraft deal and modernisation in the pipeline.

Finance minister Pranab Mukherjee allocated Rs1.93 lakh cr ($41 billion) as defence spending for the current fiscal. Out of total Rs1,93,407cr allocated, Rs1,13,829cr have been allocated for revenue (net) expenditure and Rs79,578cr for capital expenditure, which includes modernisation-related expenditure.

The deals which are likely to be signed this year include 126 Medium Multi Role Combat Aircraft, 145 Ultra Light Howitzers (ULH), 197 Light Utility Helicopters and others weapons and systems for the three services. India plans to spend over $100 billion on defence acquisitions in the next five to 10 years. The defence outlay constitutes 1.90% of GDP(estimated to be Rs101,59,884cr).

Meanwhile, the fate of the National Counter Terrorism Centre, meant for internal security, remains suspended as there is no mention of the agency in current fiscal year. However, the demand for grants for Intelligence Bureau saw an increased of Rs120cr which could also mean additional provision for the NCTC.