The Narendra Modi government has allocated Rs 4,78,196 crore ($63.75 billion) for defence. The figure for defence expenditure was included in the budget documents as Finance Minister Nirmala Sitharaman skipped mentioning it in her budget speech.
Among components of the allocation for defence, Rs 1,35,060 crore ($18 billion) has been allocated for capital expenditure, while the pension component this year is Rs 1,15,850 crore.
The ongoing tension with China at the Line of Actual Control in Ladakh and worries about a possible two-front conflict with Pakistan had led to calls for a substantial hike in defence expenditure.
During last year's budget, Sitharaman announced a total of Rs 4.71 lakh crore as defence allocation, which was a marginal hike of around 5.5 per cent over the previous allocation. In 2020, Sitharaman announced Rs 1.13 crore had been set aside as capital outlay to purchase new weapons, aircraft, warships and other military hardware. The allocation in 2020 was considered inadequate for numerous major modernisation projects being undertaken by the three services. Moreover, the impact of the COVID-19 pandemic hit expenditure plans adversely last year, delaying or disrupting modernisation projects.
