New Delhi: Amidst its modernisation drive, the Defence Ministry Thursday got Rs 2,03,672 crore for 2013-14, marking a hike of about 14 percent over last year's revised allocation with Finance Minister P Chidambaram promising more funds required for national security.
The allocation is up by Rs 25,169 crore from last year's revised estimate of Rs 1,78,503 crore.
The budget estimate last year was Rs 1,93,407 crore but it was slashed by Rs 14,904 crore later by the Finance Ministry owing to the strain on the economy.
In terms of comparison between the budget estimates of the financial year 2012-13 and 2013-14, the hike is 5.31 percent.
The budgetary allocation this year marks a reduction in GDP ration from 1.90 last year to 1.79 percent.
"I propose to increase the allocation for defence to Rs 2,03,672 crore. This will include Rs 86,741 crore for capital expenditure," Chidambaram said while presenting the Budget in the Lok Sabha.
"The Defence Minister has been most understanding and I assure him and the House that constraints will not come in way of providing any additional requirement for the security of the nation," he said.
The allocation is about Rs 50,000 crore less than the ministry's demand but Defence Minister A K Antony was satisfied.
"Factoring the current economic scenario, he (Chidambaram) has been fair to the Defence sector also by increasing the budget and giving an assurance that should there be any urgent need in future the same would be provided," Antony told reporters.
The Defence Ministry is in a major modernisation process with several acquisitions in the pipeline besides upgradation of infrastructure in the northeast along with China border.
Among the major acquisitions in the offing are the 126 multirole combat aircraft, 22 Apache attack choppers and 15 heavy-lift choppers.
The Defence Ministry had last year demanded Rs 40,000 crore more for meeting its modernisation requirements in addition to the Rs 1,93,407 crore but that could not be provided.
Rs 14,904 crore were cut from its budget allocation. Of this cut, Rs 10,000 crore were from the capital expenditure and the remaining was from revenue expenditure.
Of the total expenditure of the Government of India, defence expenditure would account for ten percent which is one percent less than 2012-13.
In 2011-12, the Government had allocated Rs 1,64,415 crore for the defence ministry and later, it was revised to Rs 1,70,937 crore. Increasing the allocation by 13 percent, the Government gave Rs 1,93,407 crore to the ministry for 2012-13 but in actual terms it came out to be around 4.45 percent due to the budget cut in revised estimates.
Under the break up of the budget, Rs 44,500 crore have been allocated for pensions to be paid to retired defence personnel and the DRDO has been allocated Rs 5,500 crore
Of the Rs 1,16,931 crore allocated for Revenue Expenditure, the Army has been allocated Rs 81,833 crore, the Navy has got Rs 12,194 core while the IAF received Rs 18, 295 crore.
Of the Rs 86,741 crore capital expenditure fund, the IAF has the largest share of over Rs 38,000 crore followed by the Navy and the Army. These funds are used for modernisation of equipment and raising new formations.
The major portion of these funds would be used to procure aircraft and aero-engines for the services for which Rs 33,776 crore have been earmarked for the year 2013-14.