P Chidambaram announced the Defence budget for 2007-08 at Rs 96,000 crore, an increase of Rs7,000 crore from the present financial year.
FM effects a modest 7.86 per cent increase despite pleas for funds
NEW DELHI: Finance Minister P Chidambaram announced the Defence budget for 2007-08 at Rs 96,000 crore, an increase of Rs7,000 crore from the present financial year.
In real terms, the increase is Rs 10,000 crore, because the Ministry of Defence has spent only Rs 86,000 crore according to the revised estimates of 2006-07.
Defence Ministry officials, however, said the increase was in line with their expectation. Taking into consideration the inflation rate of 6.6 per cent, the allocation translates into an increase of 1.26 per cent over 2006-07.
The increase is also keeping with India’s budgeting trends in recent times, pegging the percentage of country’s defence expenditure at less than 2.5 per cent of GDP. Chidambaram said in case of any “additional requirement” it “will be provided”. The capital outlay, meant for fresh procurements, is Rs 41,922 crore. Defence Minister AK Antony said he was “satisfied with the commitment of providing extra funds”, and the increase in budget is indication of the government’s resolve to “go ahead with modernisation”.
“The enhanced provisions take into account normal growth in pay, allowances, maintenance expenditure and modernisation plans,” according to the statement placed in Parliament .
Given the increase in pensions and other revenue expenditures, this component has been increased to Rs 54,078 crore from Rs 51,542 crore in 2006-07. A senior Defence ministry official said the increase was “on expected lines”, but was “inadequate” if the government wants to speed up the modernisation process.
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