OPINION: Budget 2019 provides provisions for big ticket Defence purchases

Major General Ravi Arora

File photo: PTI

File photo: PTI

The Interim Budget for the financial year 2019-20, presented by the Shri Piyush Goyal in the Parliament on 1 February, envisaged a total outlay of  Rs. 27,32,667.84 crore. Out of this, Rs 3,05,296 crore has been earmarked for Defence.  This accounts for 11.2 per cent of the total Central Government expenditure for the year 2019-20.

Out of Rs. 3,05,296 crore allocated for the financial year 2019-20, Rs. 2,09,262.71 crore has been allocated for Revenue (Net) expenditure and Rs. 1,03,304.31 crore for Capital expenditure for the Defence Services and the Organizations/ Departments under Ministry of Defence. In the previous year, 2018-19 the allocations were Rs 1,95,947.55 crore for Revenue and Rs 99,563.86 crore for Capital Expenditure.

The allocation of Rs. 3,05,296 crore represents a growth of 1.08 per cent over Budget Estimates (Rs. 2,82,733 crore) and 1.07 per cent over Revised Estimates (Rs. 2,85,423crore), respectively for the financial year 2018-19. The higher revised expenditure of Rs2690 crore on Revenue account occurred due to higher requirements for transportation of stores and works, etc. At least no funds were surrendered unutilised.

The Revenue allocations compare as follows:

 

Defence stuff
The Capital allocations for the Army, Navy and Air Force for 2019-20 as compared to 2018-19 (BE) have been as follows:

Defence More Stuff

 

The amount of Rs. 1,03,304.31 crore, allocated for Capital expenditure, includes modernization related expenditure and is Rs 9322.18 higher than the RE of previous year.

In 2018-19, the ratio of Revenue: Capital outlay was 66:34. This year the percentage works out to 67:33.

File Photo: Indian army personnel take position during a gun battle. (Representative Image).

File Photo: Indian army personnel take position during a gun battle. (Representative Image).

For Defence Pensions, which is over and above the outlay mentioned above, an amount of Rs. 1,12,079.57 crore has been provided in BE 2019-20. This is 1.05 per cent above the BE 2018-19 of Rs. 1,06,775.14 crore.

Overall the budget in real terms after allowing for inflation is far lower than the previous year, but provisions have been made in the capital allocation for big-ticket items for the Indian Air Force and the Indian Navy. The government will have to find ingenuous ways to provide for committed liabilities and new schemes. The industry will not be amused.

- Major General Ravi Arora, Chief Editor, Indian Military Review