The Narendra Modi government’s first budget of the second term has generated predictable reactions, but one of the most predictable ones pertains to its treatment of the defence sector. Finance minister Nirmala Sitharaman has allocated ₹4.31 trillion for military spending (including military pensions of₹1.12 trillion), keeping it unchanged from the 1 February interim budget.
Compared to around 17% in 2014-15, this year’s defence budget will comprise 15.5% of government expenditure and only 2.04% of gross domestic product (GDP), as compared to 2.28% of GDP in 2014-15. What was significant was the decision of the finance minister to exempt the import of defence equipment from basic customs duty in light of the nation’s defence modernization requirements.
Given the above numbers, as was expected, there has been criticism of the government for failing to adequately provide for the needs of the armed forces. Read More