Antony favours defence budget at 3 percent of GDP

June 10th, 2008 - 10:38 pm ICT by IANS  

A file-photo of P. Chidambaram

New Delhi, June 10 (IANS) Defence Minister A.K. Antony says India’s budget for the military should be pegged at three percent of the GDP to match that of the country’s neighbours. “Actually, considering our economic boom, our allocation for defence is not matching. Every year it is now coming down. It is below two percent while the average (for the neighbourhood) is three percent,” he told reporters on the sidelines of the two-day Unified Commanders Conference here Tuesday.

“It is below two percent. Actually it is 1.9 percent. It should be three percent. Our defence budget, compared to all the major countries, is one of the lowest in the world,” the minister added.

Successive parliamentary committees have recommended that the defence budget be raised to at least three percent if the armed forces are to rapidly modernise.

Finance Minister P. Chidambaram had in February hiked the defence expenditure for fiscal 2008-09 by 10 percent of what it was the previous year to Rs.1,056 billion ($26.5 billion) - and promised even more funds if these were required.

The allocation accounts for 14 percent of the government’s total spending of Rs.7,508 billion during the fiscal that began April 1.

“The allocation for defence is being raised by 10 percent from Rs.96,000 crore (Rs.960 billion) to Rs. One lakh five thousand six hundred crore (Rs.1,056 billion),” Chidambaram said while presenting the budget in the Lok Sabha Feb 29.

“I have assured the raksha mantri (defence minister) that more money would also be provided if necessary, especially for capital expenditure,” he added.

The 10 percent hike exceeds the 7.8 percent increase granted for the 2007-08 fiscal.

Of the total allocation, Rs.480 billion has been earmarked for the purchase of hardware and Rs.579 billion for the three services and for R&D.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |