India’s defence budget hiked 10 percent to Rs.1,056 bnFebruary 29th, 2008 - 6:39 pm ICT by admin
New Delhi, Feb 29 (IANS) With the Indian armed forces embarking on an extensive modernisation drive, Finance Minister P. Chidambaram Friday hiked the defence expenditure for fiscal 2008-09 by 10 percent 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 beginning 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 Friday.
“I have assured the raksha mantri (defence minister) that more money would also be provided if necessary, especially for capital expenditure,” he added.
While the 10 percent hike exceeds the 7.8 percent increase granted for the 2007-08 fiscal, the allocation is still below 2.5 percent of the GDP, even as successive parliamentary committees have recommended this be raised to at least three percent if the armed forces are to rapidly modernise.
The armed forces are eyeing military hardware worth Rs.155 billion over the next five years in a series of big-ticket purchases of combat jets, helicopters, artillery guns and ships.
Defence Minister A.K. Antony immediately welcomed the hike, saying it would aid in the armed forces’ modernisation drive.
“I am happy. You have heard the finance minister say on the floor of the house that more money would be provided, if required, particularly for capital expenditure,” Antony told reporters in parliament after the budget had been presented.
“This will aid in the modernisation drive of the armed forces,” Antony said, adding: “After the finance minister’s statement, I can say I am happy with the budget.”
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.
Of the three services, the 1.1 billion-strong Indian Army will expectedly get the lion’s share of Rs.362 billion, followed by the Indian Air Force (Rs.108 billion) and the Indian Navy (Rs.74 billion).
The Defence Research and Development Organisation (DRDO) has been allocated Rs.33 billion.
In addition, Chidambaram has earmarked Rs.155 billion for pensions and Rs.440 million for the 22 Sainik Schools in the country to enable them improve their infrastructure and sports facilities.
The finance minister also extended a huge helping hand to millions of ex-servicemen across the country by opening up employment opportunities in the banking sector.
“I would urge all regional rural banks to open at least 250 new accounts every year. Ex-servicemen and retired bank employees can play a major role in this by serving as facilitators,” he said.
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