The Union Budget made a 19 per cent higher allocation for the country's armed forces to buy new weaponry compared to last year and the highest in the last 15 years. The Union Budget presented by Finance Minister Nirmala Sitharaman today pegged the defence budget at Rs 4.78 lakh crore, which includes a capital expenditure budget of Rs 1.35 lakh crore to buy new military hardware.
Defence Minister Rajnath Singh thanked Prime Minister Narendra Modi and Ms Sitharaman for increasing the defence budget.
"I specially thank PM& FM for increasing the defence budget to 4.78 lakh cr for FY21-22 which includes capital expenditure worth Rs 1.35 lakh crore. It is nearly19 percent increase in Defence capital expenditure. This is highest ever increase in capital outlay for defence in 15yrs," Mr Singh tweeted.
I specially thank PM& FM for increasing the defence budget to 4.78 lakh cr for FY21-22 which includes capital expenditure worth Rs 1.35 lakh crore. It is nearly19 percent increase in Defence capital expenditure. This is highest ever increase in capital outlay for defence in 15yrs— Rajnath Singh (@rajnathsingh) February 1, 2021
In last year's budget, the defence forces were given Rs 20,776 crore additional funds under the capital budget meant for unplanned expenses of the armed forces. It is believed that these funds were used by the three arms of the military to make emergency weapons and ammunition purchases to shore up defences along the Ladakh frontier, where India and China are in the midst of an unprecedented faceoff for nearly a year.
Ms Sitharaman's huge defence budget comes amid forecast that fiscal deficit for fiscal 2021 has been pegged at 9.5 per cent of the gross domestic product (GDP) and would fall to 6.8 per cent in fiscal 2022.
The fiscal deficit will reach below 4.5 per cent by 2026, Ms Sitharaman said while presenting the Union Budget after a difficult year for the economy due to the COVID-19 pandemic.
The government will approach the market for an additional Rs 80,000 crore to fund the fiscal deficit in the current financial year, Ms Sitharaman said.