Keeping pace with the growing military spending of China, the union government on Monday announced a 10 per cent hike in country's defence expenditure to Rs224,000 crore ($36 billion). China will spend $148 billion on its military for the year 2014.
Union finance minister P Chidambaram, while presenting the interim budget for 2014-15 in the Lok Sabha said that the amount is against the Rs203,627 crore allocated in the budget for 2013-14. While Rs89,588 crore has been set aside for acquisitions by the armed forces, Rs134,410 crore will go toward payment of salaries and pensions and other expenses.
The allocation for the ministry in the last financial year (2013-14) was Rs2,03,672 crore, of which around Rs 80,000 crore was to be spent on modernisation.
Officials said that the hike in allocation comes at a time when the ministry has a number of key modernisation projects in the pipeline while some are in their final stages and expected to materialise in the coming months. India is gradually building its capability to counter any Chinese aggression at its eastern sector.
Big tickets purchases include the deal for 126 fighter jets with France, 22 Apache combat choppers, 15 Chinook heavylift helicopters and 145 ultra light howitzers etc. Besides, Mountain Strike Corps for China border has also been raised.
Defence ministry is also in advance stage of negotiations for a Fifth Generation Fighter Aircraft (FGFA) programme with Russia, on which it is expected to spend around Rs 1.5 lakh crore in the next 10-15 years.
MoD is also expected to issue tenders to procure six conventional diesel electric submarine for the navy, which will cost approximately Rs60,000 crore.
And to boost indigenisation in defence sector, huge amount of money would be requiring to built research and develop.