Budget 2022: Defence Budget Allocation May Increase Amid Rising Chinese Belligerence

According to sources, the Ministry of Defence has already submitted its 'wishlist' to the government and the Finance Ministry is likely to incorporate major recommendations in Budget 2022.

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Defense Budget 2022: Amid rising Chinese belligerence and a hostile Pakistan, how much will the Centre allocate for the defence budget will become clear on February 1, when the Finance Minister Nirmala Sitharaman presents the Union Budget 2022 in the Parliament.

According to sources, the Ministry of Defence has already submitted its 'wishlist' to the government and the Finance Ministry is likely to incorporate major recommendations in Budget 2022.

With India facing threat of a two-front war - Chinese PLA in the east and Pakistan in the west - military modernisation becomes a top notch priority for the Indian Government. 

Although India's defence budget is the fifth-largest in the world (after the US, China, Saudi Arabia and Russia), it is way lower than what China spends. According to experts, China's defence budget is about 3 percent of its GDP, while India spends only 1.58 percent of its GDP on its defence forces. 

Apart from the border threat, the army also needs to fight terrorism in Kashmir and the north-eastern states for which military capabilities need to be enhanced.

The Indian army is one of the largest in the world due to which huge sum of the defence budget goes into paying salaries and pensions, which sometimes become a stumbling block. However, Prime Minister Narendra Modi has made his intent for defence modernisation and spending very clear with new purchases like Rafale jets.

The Modi government last year increased the defence capital expenditure by 19 percent - the highest ever increase in last 15 years - 
to buy weapons and other military equipment for the defence forces. Until now, capital budget used to be around 6-7 percent.

The defence budget also saw a marginal increase of around 1.4 percent, Rs 4.78 lakh crore for 2021-22 as against last year's allocation of Rs 4.71 lakh crore.

Out of Rs 4.78 lakh crore of the defence budget, Rs 1.35 lakh crore was earmarked for the capital budget i.e. for procurement and modernisation of the armed forces (Army, Air Force and Navy). This year, the air force got the highest share in the capital budget - about Rs 53 thousand crore. The Army got Rs 36 thousand crore and the Navy 37 thousand crore.

According to information, the capital budget of the previous year is not fully spent due to which the army will also get the remaining amount this year. The Modi government has made a provision to add the balance-amount in the next budget, which earlier used to lapse. 

Last year, in the defence budget, a provision of Rs 2.27 lakh crore was made for revenue expenditure i.e. salary and other expenses of soldiers and civil servants under the Ministry of Defence. It is believed that the Army will get emergency funds this year, similar to the previous 2-3 years.