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One sentence in Budget speech for 13% spending

Last updated on: March 3, 2011 13:47 IST

One sentence in Budget speech for 13% spending

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In his 197 paragraphs speech, running into an hour and 45 minutes of time, Union finance Minister Pranab Mukherjee devoted precisely one paragraph to the nation's defence budget.

This paragraph (para 116) reads: "In the Budget 2011-12 a provision of Rs. 1,64,415 crore (Rs. 1644.15 billion) has been made for defence services, which include Rs. 69,199 crore (Rs. 691.99 billion) for capital expenditure. Needless to say, any further requirement for the country's defence would be met."

Admittedly, this has been a standard formulation of successive finance ministers for years, however, for a government that spends close to 13 per cent of total government expenditure (though the finance ministry's "Budget at a Glance" document claims it is only 11 per cent) on defence, this is a rather cavalier treatment of one of the most important items of the government's expenditure statement.

Surely, the nation's lawmakers deserve some more details, considering that so many paragraphs of the finance minister's speech have been devoted to an elaboration of so many schemes that together do not even amount to 3 per cent of the total expenditure of the government.


Image: Lawmakers deserve more details on defence spending
Photographs: Reuters
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One sentence in Budget speech for 13% spending

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Spending proposals in the range of Rs. 100 crore (Rs. 1 billion) and Rs. 500 crore (Rs. 5 billion) have secured more space and time in the finance minister's speech, compared to the whopping Rs. 1,64,415 crore (Rs. 1,644.15 billion) defence Budget.

That the government does not share too many details about defence spending is understandable up to a point. In fact, it is entirely possible that some part of actual expenditure on equipments acquisition does not even get captured by the Budget data.

That a large part of the total defence Budget is in fact devoted to just salaries and pensions (pensions alone account for Rs. 34,000 crore [Rs. 340 billion]) is of course obvious.

To the extent that data is provided, we know that the Army continues to walk away with a lion's share of total defence spending, followed by Air Force and Navy in that order.

The time has come for the government to explain and defend this pattern of spending. Is the Indian Navy being neglected? In what way does the defence Budget reflect preparation to meet medium to long-term threats to national security?


Image: Is the Budget neglecting Indian Navy
Photographs: Reuters
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One sentence in Budget speech for 13% spending

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Is the 14 per cent hike in capital outlay on defence services, amounting to a budgeted Rs. 69,198 crore (Rs. 691.98 billion) in 2011-12, adequate? To what extent is this spending on defence going to trigger demand for services and goods within the domestic economy?

Can defence spending be an instrument of industrial policy and technology development? If so, what is the government doing about it?

What are the views of the nation's economic policy makers with respect to the role of the private sector in defence related manufacturing and services industries?

These and many such questions have been repeatedly raised in the public debate on defence and development in India that the finance minister could have tried to address while seeking the Parliament's authorisation to devote as much as 13 per cent of total government spending to defence.

In not doing so, the finance minister has lost an opportunity to bring greater transparency to defence spending.


Image: Defence spending lacks transparency
Photographs: Reuters
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