By Nirupama Soundararajan and Dnyanada Palkar
Over the past few months the major ask for defence in the 2017-18 budget has been for an increase in allocations. This year, finance minister Arun Jaitley has accommodated these requests and increased the overall allocation by 10% compared to last year (from Rs 2,48,005 crores in 2016-17 to Rs 2,74,114 crores in 2017-18). The obvious question is where this 10% increase is allocated within the budget heads under defence. However, before this, we must ask whether India’s defence allocation is adequate.
As a percentage of GDP, defence spending seems to have decreased in the last six years, particularly so since last year. This could be for two reasons. One, as the GDP base has increased, India’s defence spending has not risen concomitantly. Two, beginning last year, defence pensions have been categorised under a separate head, resulting in a whole percentage point decrease in the defence spend to GDP ratio.
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