New Delhi (The Stellar News): Union Finance Minister Nirmala Sitharaman, while presenting Union Budget 2023 on Wednesday, February 1, allocated nearly Rs 6 lakh crore to the defence sector, as per the notes on demand for grants. This includes a capital outlay of Rs 1.62 lakh crore, a 12 percent rise over last year’s Rs 1.44 lakh crore.
The actual spending during 2021-2022 on defence capital outlay was Rs 1,37,987 crore. The Budget Estimate in 2022-23 for the same was Rs 1,52,369 crore and then the revised estimate the same year was Rs 1,50,000 crore. Now, the Budget Estimate for 2023-34 is Rs 1,62,600 crore.
Capital expenditure includes money spent on salaries of armed forces and civilians, pensions, modernisation of armed forces, production establishments, maintenance, and research and development organisations.
The allocation to the Ministry of Defence constitutes 8 percent of the total Union Budget. As per the data released by the Stockholm International Peace Research Institute (SIPRI) in 2021, India is the third-largest spender on military after the US and China
According to an analysis by the PRS Legislative Research, India’s defence spending as a proportion of its total government expenditure has been decreasing over the years. Also, defence expenditure as a percentage of the gross domestic product (GDP) declined from 2.3 percent in 2012-13 to 2 percent in 2022-23.
“In the last decade (2012-13 to 2022-23), the budget of the Ministry of Defence has grown at an annual average rate of 8.6 percent, while total government expenditure has grown at 10.8 percent. During this period, defence expenditure as a proportion of central government expenditure decreased from 16.4 percent in 2012-13, to 13.3 percent in 2022-23,” the analysis revealed.
Since 2012-13, the share of the defence budget spent on capital outlay has declined. “It was 29 percent in 2012-13 and declined to 24 percent in 2019-20. In 2020-21, the share of capital outlay in the defence budget increased to 27 percent. In 2022-23, it is again estimated to be 27 percent. Note that between 2012-13 and 2018-19, the average annual growth rate of capital outlay was 5 percent while between 2019-20 and 2022-23 it was 11 percent,” the analysis revealed.
