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Interim Budget 2014: Defence allocation hiked by 10%

February 17, 2014 17:18 IST

Amid its modernisation drive, the defence ministry was on Monday allocated Rs 2,24,000 crore (Rs 2,240 billion) in the interim General Budget, marking a 10 per cent increase over the last Budget.

The allocation for the ministry in the last financial year (2013-14) was Rs 2,03,672 crore (Rs 2036.72 billion), of which around Rs 80,000 crore (Rs 800 billion) was to be spent on modernisation.

The allocation was announced in the vote-on-account presented by Finance Minister P Chidambaram.

Last time, the hike in allocation was 14 per cent compared to the previous year.

The ministry had spent 82 per cent of that amount till the start of this month.

Interim Budget 2014: Complete Coverage

The hike in allocation comes at a time when the ministry has a number of procurements in the pipeline while some are in their final stages and expected to materialise in the coming months.

These include the deal for 126 multi-role combat aircraft which is expected to cost thousands of crores of rupees. Other acquisitions in the pipeline include deals for 22 Apache combat choppers, 15 Chinook heavylift helicopters and the 126 Rafale combat aircraft.

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.

It is also in the process of issuing the tender for the approximately Rs 60,000 crore deal for procuring six large conventional diesel electric submarines for the Navy.

The ministry has been seeking additional funds of Rs 40,000 crore (Rs 400 billion) since last year, but that request has been turned down in view of the slowdown.

In view of certain defence scams in which foreign firms were involved, the ministry has also worked towards promoting indigenisation in the defence sector for which it made a major procurement policy change to make the importing of weapons systems the last option for the three Services.

Interim Budget 2014: Complete Coverage

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