Was hiked 10% in interim budget
Indian Finance Minister, Arun Jaitley today, in his Budget presentation, opted for a steady growth for Defence spending and announced a Rs 5,000 crore hike over and above the 10 per cent hike announced in the Interim budget in February this year.
The sum of Rs 5,000 crore (approx US $ 800 Million) shall include a special allocation of Rs 1,000 crore intended for a total of 14 strategic railway lines – needed by the forces in the in the Himalayas and along the land borders. Jaitley is also the Defence Minister of the newly elected Bharatiya Janata Party led government voted to power on May 16 this year.
In February this year the outgoing Congress-led United Progressive Alliance (UPA) had budgeted a hike of 10 per cent in its defence budget for fiscal 2014-2015 commencing on April 1, 2014, earmarking Rs 2,24,000 crore (approximately US $ 37.3 Billion). Of this, Rs 89,588 crore was for capital that is for new, projects, equipment and acquisitions, the Rs 5,000 crore additions will be go to the capital.
|Indian Finance Minister Arun Jaitley
Hence the defence budget, after today Rs 5,000 crore hike, stands at Rs 2,29,000 crore ( approximately US $ 38.16 Billion), that is effectively 12.30 per cent more than the previous fiscal’s Rs 2.03,672 crore. This will also account for 12.70 per cent of the total government spending.
Jaitley’s cautious approach reflects the ongoing fiscal crunch in India, however, his focus on the railway lines sorts out a long pending matter of funding these 14 strategic railway lines.
The Railways had refused to fund the project that is expected to cost Rs 78,000 crore saying either the money has to be budgeted in the Defence Ministry or the Finance Ministry makes a special allocation.
On being told that all 14 lines cannot start in one go, the Indian Army had identified four lines --- three in north-east, one in J&K --- as the topmost priority. The 14 lines, add up to 3,016 km and will entail laying of tracks in the highest parts of the Himalayas which remain snow-bound for more than 8 months of the year.
The Minister also promised to streamline the process of acquisition. With several of the acquisitions being through the import route the Dollar, which now trades at Rs 60 in exchange, will have an effect. During Last year’s budget, the dollar stood at Rs 54.90 - a difference of Rs 6 in one year.
Way behind China
New Delhi’s, surge of 12. 30 per cent hike still leaves it way behind China’s budget on its defence. On March 5, 2014, Beijing announced a budget of US $ 131.57 billion that is more than the combined defence budgets of Japan, India and South Korea.
The other three economic powerhouses of Asia. The three will jointly spend US $ 117. 02 Billion during the same period – that is US $ 14.55 billion fewer than China’s allocated spending. India has allocated US $ 38.16 Billion for Defence. The Japanese have an allocation of US $ 45. 86 Billion while the South Koreans have listed a budget of US $ 33 Billion.
China made a jump of 12.2 per cent, a kind of warning signal to India, Japan and the ten-nation Association of South East Nations (ASEAN) – some of which are locked in disputes with China in the South China Sea.
War Memorial near India gate
The much awaited war memorial was finally announced by the Government today. It will not be under the arched-dome British era India Gate in Central Delhi --- that was the demand of the Armed forces, but was not agreeable to the Delhi Urban Arts Commission. The memorial will be at “Princess Park” that is on the road around the India Gate. The location will be between the Baroda House and the Patiala House. A sum of Rs 100 crore has been earmarked for this memorial.