Budget 2014: Despite double role, FM puts lid on defence spend

NEW DELHI: The defence budget has been marginally hiked to Rs 2,29,000 crore ($38.24 billion) from last year's Rs 2,03,672 crore allocation, belying expectations of the armed forces for a big bang jump of over 20% from the BJP-led government. Finance minister Arun Jaitley, incidentally, also heads the defence ministry.

The 12.4 per cent hike basically caters for inflation at a time when the armed forces are struggling to even properly maintain existing weapon systems and platforms, leave alone inducting new ones.

India's budgeted defence expenditure remains just 1.78 per cent of the projected GDP figure for 2014-2015, far less than the 3% being demanded for years to ensure requisite deterrence against China and Pakistan.

But what will spread some cheer are steps like the Rs 100 crore for establishing a national war memorial near the India Gate complex in New Delhi, Rs 1,000 crore for one rank/one pension for ex-servicemen, Rs 100 crore for a technology development fund and raising of the FDI cap in defence production to 49 per cent.

While revenue expenditure (day-to-day costs and salaries) is pegged at Rs 1,34,412 crore, the capital outlay for modernization has been hiked by Rs 5,000 crore to take it to Rs 94,588 crore.

A major chunk of the capital outlay will go for "committed liabilities", leaving quite less for desperatel yneeded fighters, submarines, howitzers, air defence weapons and helicopters.