Union Finance Minister Arun Jaitley allocated Rs 274,000 crore for the defence sector in Union Budget 2017-2018 on Wednesday. This allocation will allow Rs 86,000 crore to be used for capital acquisition, reports noted.
The current Budget, however, marks a nominal increase in defence allocation when compared with that of last year's, which was Rs 2,49,000 crore. This marks an overall 5.8 percent increase in the defence budget, which barely meets inflation and salary hike requirements, the Economic Times reported. In comparision, however, the Budget of 2016-2017 saw an increase of 11 percent.
Jaitley also proposed a centralised defence travel system, where the soldiers and the officers would be able to book tickets online and thus saving them the time and energy from waiting in the queues along with the civilians. Further, it also announced the creation of a web-based pension distribution system for the defence personnel.
Nevertheless, R D Vakil, Director of Solar Industries India Limited, whose company is India's largest manufacturer of Industrial Explosives and Explosive Initiating Systems and has been involved in manufacture of warheads composition, HMX and RDX components, composite propellants for various rockets and missiles called the defence allocation in Budget 2017-18 as "satisfactory."
Speaking to International Business Times, India he however wished that the "Government would have given some sops like interest subvention to the defence sector similar to given in the housing sector." He also believed that the government "should consider giving tax breaks and financial assistance to attract more investments in the defence segment."
On the question of the government's 'Make in India' initiative, he believed that it "will definitely help the nation to enhance its defence preparedness."
There were predictions that the Union Budget 2017-2018 would see the defence sector taking a back seat with many blaming it on demonetisation too. Experts had earlier noted that at least 10 percent increase was required to keep up with the inflation and the country needed huge money to take forward its armed forces modernisation process.
The Defence Ministry had come under pressure due to its under utilisation of allocated funds. It had returned Rs 35,000 crore from its capital allocation for the previous four years.