Union Budget 2019-20 allocates Rs 3.19 lakh crore for defence, excluding pension

NEW DELHI: Union Budget for the financial year 2019-20, presented by Finance Minister Nirmala Sitharaman in the Parliament on Friday, envisaged a total outlay of Rs 27,86,349 crore. 

Out of this, Rs 3,18,931.22 crore has been earmarked for Defence (excluding Defence Pension). 

For Defence Pension, an amount of Rs 1,12,079.57 crore has been provided in Budget Estimate 2019-20. 

Total Defence Allocation (Rs 4,31,010.79 crore), including Defence Pension, accounts for 15.47 per cent of the total Central Government expenditure for the Financial Year 2019-20.

The allocation of Rs 3,18,931.22 crore represents a growth of 7.93 per cent over Budget Estimates (2,95,511.41crore) and 6.87 per cent over Revised Estimates (Rs 2,98,418.72 crore), respectively for the Financial Year 2018-19.

Out of Rs 3,18,931.22 crore allocated for the Financial Year 2019-20, Rs 2,10,682.42 crore have been earmarked for Revenue (Net) expenditure and Rs 1,08,248.80 crore for Capital expenditure for the Defence Services and the Organisations/Departments under Ministry of Defence. 

The amount of Rs 1,08,248.80 crore allocated for Capital expenditure, includes modernisation related expenditure. The Capital Allocation of Ministry of Defence under BE 2019-20 is 31.97 per cent of the total Central Government Capital Expenditure, which is Rs 3,38,569 crore.

In a significant development, import of Defence Equipment not manufactured in India has been exempted from Basic Customs Duty. This will have an impact of augmenting the Defence Budget by approximately Rs 25,000 crore on account of savings in expenditure on Customs Duty over the next five years.

Presenting her maiden budget, FM Sitharaman announced that the import of defence equipment that are not being manufactured in India are being exempted from basic customs duty.

“Defence has an immediate requirement of modernisation and upgradation. This is a national priority. For this purpose, import of defence equipment that are not being manufactured in India are being exempted from the basic customs duty," Sitharaman said.

"My proposal is driven with the objective of securing our borders achieving higher domestic value addition through Make in India reducing import, protection to MSME and promoting clean energy curbing non-essential import and correcting inversions," she said while presenting the Union Budget for 2019-20 in Parliament.