Finance Minister Nirmala Sitharaman did not mention the defence outlay in the budget speech in the Lok Sabha surprising many in the press because of her past as the defence minister during one of the most turbulent times for the defence forces in recent history. However, she corrected the impression during the post-presentation press conference saying she did not want to elaborate on everything. But she surprised the press crop a second time by announcing she had increased the outlay from what was proposed in the interim budget that Piyush Goyal presented standing in for Arun Jaitley.
Heading the Ministry of Defence (MoD), Sitharaman had successfully defended the Narendra Modi government during the first stint against the opposition attacks over the $8.8-billion deal to buy 32 Rafale multirole fighter planes from French aviation giant Dassault Aviation. Sitharaman's conduct during the tense days of the border skirmish with Pakistan following India air strikes on Balakot to avenge the Pulwama terror attack was also marked by grace and resolve.
While she made mention of the boost to India's beleaguered defence sector with basic customs duty exemption for import on defence equipment.
The interim budget presented on February 1 ahead of the general elections made a Rs 3.05 lakh crore ($43 billion) outlay for the defence sector (excluding salaries and pensions). Although this figure compares favourably with the spend of national government around the globe, it is barely enough to cover the ambitious modernisation goals. Considering the low point from which the defence forces have started the modernisation programme, it is believed that the sector needs all budgetary support. This point is particularly emphasised in view of the complex geopolitical situation in the region.
The Interim Budget outlay was more than last year's budgetary allocation of Rs 2.85 lakh crore ($40 billion). Defence observers then pointed out that although there was a hike in rupee terms, the allocation was actually less than the previous year's once the rupee depreciation is factored in.
Responding to a question, Sitharaman said she had increased the amount to Rs 3.18 crore, with a marginal increase over the Interim Budget outlay. The allocation for capital expenditure including purchases was Rs 1.08 lakh crore. The revenue expenditure, which includes expenses on salaries and maintenance of establishments, is pegged at Rs 2,10 lakh crore as against Rs 1.88 lakh crore for 2018-19. The outlay for pension is Rs 1.12 lakh crore to accommodate the rise in view of the implementation of the one rank one pay principle.