India-China Standoff: Defence Budget expected to be hiked to meet urgent requirements of the armed forces

Indian Union Budget 2021-22: Amidst the continued standoff between India and China, along the Line of Actual Control (LAC) in eastern Ladakh, the defence budget for the FY 2021-22 is likely to witness unprecedented growth.

Previously

For the Year 2020 – 2021, the hike was but less than two per cent hike over the Revised Estimates (RE) for the Year 2019-2020. Allocation of Rs 3.37 Lakh Crores for 2020-21 constituted nearly 1.5 per cent of the projected GDP and therefore the Capital allocations were not enough for fulfilling the committed liabilities. And, if the pensions for the defence personnel are added then the budget outlay for 2020-21 stood at Rs 4.71 lakh crore FY, expectations are that there could be a decent hike and it could touch around Rs 6 lakh crore.

Why?

This will help in moving the large ticket projects which are now needed on urgent basis which will help in dealing with the increasing threats from China and Pakistan. Already, in view of the standoff with China, urgent procurements for the armed forces had to be made which touched around USD 2 billion.

The office of the CDS is additionally planning new commands and the focus is on the jointness of the services, and prioritization and financing. Therefore, the Ministry of Defence would keep these new changes in mind too.

Modernisation Fund

There could be special modernization fund too for the armed forces. This is something that the armed forces need.

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