With an aim of fast-tracking procurement of defence equipment, the government today steeply hiked the budgetary allocation for defence to Rs 141,703 crore (Rs 1,417.03 billion), a 34 per cent increase over the previous fiscal.
The increase in real terms amounted to Rs 36,103 crore (Rs 361.03 billion) over last year's allocation of Rs 105,600 crore (Rs 1,056 billion) and is apparently intended to speed up procurement of defence equipment and plug the security gaps exposed by the November 26 Mumbai terror attacks last year.
The 34 per cent increase is substantial compared to the increase of only 10 per cent effected in last year's budget over Rs 96,000 crore (Rs 960 billion) allocated in 2007-08.
In fact, Finance Minister Pranab Mukherjee had allocated the same amount for defence in his interim budget presented in Parliament on February 16 before the Lok Sabha polls.
Despite the hike this year, India's defence spending is still at about 2 per cent of the GDP, compared to China's 7 per cent and Pakistan's 5 per cent.
The defence ministry had returned nearly Rs 7,000 crore (Rs 70 billion) as unspent money from its last year's capital outlay of Rs 48,007 crore (Rs 480.07 billion) as its plans to procure light utility helicopters and 155mm artillery guns did not fructify.
The increased allocation for defence assumes significance as the government had decided to fast-track acquisition of equipment for the armed forces following the Mumbai attacks.
The defence forces have already prepared a long list of equipment, mainly for its special forces' commandos who carry out specialised strikes, including anti-terror operations, to be bought under the fast track process.
After the Mumbai attacks, the government also initiated a massive revamp of the nation's security structure, which includes creation of a coastal command and entrusting overall responsibility for maritime security with the Navy and integrating activities of all sea-faring ministry and departments including petroleum, shipping and fisheries.
It also approved the Coast Guard's request for purchase of fast patrol craft for securing the long-winding 7,417 km coastline and to hire helicopters for maritime reconnaissance.
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Budget 2009: Complete coverage