Budget 2012-13: Defence budget increased to Rs 1.93 lakh crore

BANGALORE: Finance minister Pranab Mukherjee has announced more than 17% hike in India’s defence expenditure for the financial year 2012-13, as the country looks to off-set growing Chinese dominance in Asia.

Mukherjee allocated Rs 1.93 lakh crore ($41 billion) as defence spending for the current fiscal, barely weeks after the country’s northern neighbour announced a whopping 11.2% increase in its military budget to $106.4 billion.

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The finance minister also said that capital expenditure for the same period has been raised Rs 79,579 crore ($17.5 billion), from Rs 69.199 crore a year ago.

The increase in allocation, up from Rs 1.64 lakh crore ($36 billion) last financial year, also comes at a time when the India’s armed forces are in the process of modernising itself as well as acquiring a slew of military equipment, including combat aircrafts, submarines and artillery.

China’s military budget is currently the second highest in the world, just below that of the United States, and has steadily increased every year over the last decade. It has been a source of concern for India, which has had a rather fractious military relationship with China, culminating in a full-scale conflict in 1962.