Budget 2021: Out of the total allocation, Rs 1.35 lakh crore has been set aside for capital outlay for buying new weapons, aircraft, warships, and other military hardware.
The central government had hiked the defence budget by six per cent last year; an amount of Rs 4,71,378 crore was allocated to the defence sector, which included expenditure on salaries and pensions.
Budget 2021: China and Pakistan are likely to prompt more money allocation for the defence forces for the second straight year
The biggest hike in allocation for defence forces came in the defence pension as the budget went up to Rs 1.33 lakh crore from last year's Rs 1.17 lakh crore allocated last year.
Commodore C Uday Bhaskar (Retired), Director, Society for Policy Studies said, "My expectation is that Budget 2020 will be a meaningful redress of the imbalance in the defence allocation, wherein the capital component of the total fiscal allocation for defence will be brought back to the optimum of 40 per cent-.
CII has suggested that the duty exemption should be extended to the domestic defence industry on import of raw material, components or parts required for manufacturing defence systems.
The maritime economy constitutes nearly five per cent of the world economy, Defence Secretary Ajay Kumar said.
Ashwani Siwach former head of Territorial Army said defence budget allotment is only 6 per cent more than last year's budget.
In an interim budget announced in February before national elections, the government allocated Rs 4.31 lakh crore ($62.27 billion) for defence, a 6.6 per cent rise over the previous year, raising concern at the time it wouldn't be enough for modernisation.