Finance Minister of India has not mentioned allocations for the defence ministry in his annual budget speech. The absence of any mention of defence in this year's budget makes Arun Jaitley unique in that sense.
In his budget proposals for the year 2016-17 in Parliament on Monday, Jaitley did talk of the extra burden that the nation has to bear for the implementation of the Seventh Pay Commission Report and One Rank One Pension (OROP) for the defence forces. But then the fact remains that pensions do not constitute a part of the defence budget.
Indian GDP growing at about seven percent over last year and given the global recession, no government, let alone the one led by Modi, would have been able to go for a substantial hike in Indian military expenditure. But in doing that, it has made some changes in the method of allocations this year.
Traditionally, there have been six headings of defence budget: Army, Navy, Air Force, Defence Research and Development Organisation (DRDO), Ordnance Factories (OF) and Civilians (working along with the forces). This time what Jaitley has done is that he has clubbed DRDO, OF and Civilians under the heading 'Defence Misc' and the three services under the heading 'Defence Services'.
For the first category, Jaitley has provided Rs 1,18,465.84 crore whereas for the three services he has allocated Rs 2,22,456.14 core. If one adds the two, we have total figure of Rs 3,40,921.98 crore for defence in this year's budget. This is thus an increase of Rs 94,204.98 crore over the last year's budget which stood at Rs 2,46,727 crore. It is a considerable increase in terms of percentage.
However, as has been the case over the last years, this time too the Revenue heading takes the giant share in the budgetary allocations. Under the 'Miscellaneous' heading, the revenue side is Rs. 24,510.23 crore as against the capital front's Rs 11,622. 95 crore.