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A review on India’s Defence Budget 2009-10

By Amarendra Bhushan for CEOWORLD Magazine Updated:July 6, 2009

Since militants killed 166 people in three days in Mumbai in November, Indian government defence spending would grow by 25 percent as it moves to modernise weapons systems and overhaul its security forces.

The shopping list of the Services includes virtually all types of weapons and systems, including big-guns, fighter aircrafts, armoured vehicles, radars, missiles, naval vessels, among others.

“We are going through tough times,” Finance Minister Pranab Mukherjee had said at the time, adding: “The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism. A threshold has been crossed. Our security environment has deteriorated considerably.”

Despite the hike this year, India’s defence spending is still at about 2 per cent of the GDP, compared to China’s 7 per cent and Pakistan’s 5 per cent.

The growth of over 34 per cent in India’s defence budget is one of the highest in the country’s history of defence spending (the last time the defence budget was increased by over 30 per cent was in 1987-88 when allocation was increased by 43.4 per cent to Rs. 12,512 cores).

- Defence spending would grow by 25 percent in 2009-10 to $29.39 billion.

- country will spend $562 million exclusively for boosting border security and modernising its police force.

- 2 percent higher than what was announced in February’s interim budget.

- It is planning one of its biggest-ever deals, the $10 billion purchase of 126 fighter jets.

- A $100 million aid package for the rehabilitation of Tamil war displaced in Sri Lanka.

- Allocate 260 million rupees ($5.4 million) under the federal budget to set up an optic-fiber cable network exclusively for the defense forces.

- To put the figure in perspective, total budgeted pay and allowances debited from the Services’ budgets has more than doubled from 21,891.67 crores in 2008-09 to Rs. 44,500.69 crores in 2009-10.

- Army accounts for the largest share of the 2009-10 budget with an approximate allocation of Rs. 76,680 crores, followed by the Air Force (Rs. 34,432 crores) and the Navy (Rs. 20,604 crores).

- While the Ordnance Factories (OF) have a budget of Rs.1,505.45 crores, the DRDO’s budget is Rs. 8,481.54 crores.

- The main agenda of the government includes the successful execution of $10.2-billion deal for the acquisition of 126 Medium Multi Range Combat Aircraft for which the Indian Air Force will begin field trials in August.

- The Indian Army is also slated to acquire about 200 Light Utility Helicopters and the Navy has already signed a deal for three Long Range Maritime Patrol Aircraft, besides negotiating the price of the Aircraft Carrier Admiral Gorshkov (INS Vikramaditya).

- The Navy is also focusing on the development of an indigenous aircraft carrier, a submarine and other platforms.

- The budget has also allocated Rs.21,790 crore for pensions, Rs.4,757 crore for the Defence Research and Development Organisation (DRDO) and Rs.832 crore for defence ordnance factories.

But, India seldom spends its entire budget allocation for defence because of red tape associated with arms purchases unless it clears pending deals faster, the budgetary allocation would not make any difference.

At least 38 court cases relating to arms agreements are still pending against bureaucrats and military officers.

India is planning one of its biggest ever arms purchases, a $10 billion deal to buy 126 fighter jets and U.S. Defense Secretary Robert Gates was in India earlier this week to push American bids for that deal.

It also has plans to spend $30 billion on imports over the next four years to modernise its largely Soviet-era arms as India asserts its military power in South Asia.

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Tagged with: India’s Defence Budget

capton

According to present scenario China and Pakistan allies is major threat to India. China is emerging as a big threat to India and continuous intrusion in India-China border is the proof itself. Now Pakistan has developed it's military strength more better then previous years. Pakistan's continuous spending in defense and acquiring new technologies shows it's intention to match Indian military strength. In this condition India must raise its spending on modernizing of forces and getting new technologies. South Asia's power will be balanced when India will have a modern force along with high-tech weaponry. I strongly recommend India must must raise it's defense budget up to 5% of its GDP in 2011 and 9% till 2015 to achieve superiority in Asia and maintaining a power balance to maintain peace. "Some time power is necessary to maintain peace."

defencein

To Have a steady growth in economy we need safety to protect, So even If the economic growth is in the ration 2:3 with that of military, it works fine... Coz we need a steady groth ,not a fast one... We should be assured of that growth, rather than just hoping for it...

stopnuke

Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes … known instruments for bringing the many under the domination of the few.…

No nation could preserve its freedom in the midst of continual warfare.India has to continue spending on defense as we are in much complicated gegraphical area, Having both pakistan and china around us, Both nuke aresenal

global peace

I agree, secutiry should be on high priority. but i guess now a days economic development is more important . because the money comes from economic, so more you put into economic more you get out of it and more you will be able to spare for the defence budget, so in my thinking it wolud be wise to put more money in economy at this time.

fight master

Why not just spend 3% on defense? given our threat perception, we should have been spending 3% a long time ago.

Whatever they do, I hope there isn't one penny left at the end of the year, India cannot afford to have such a lackadaisical approach towards its defense. We need to build and acquire all that we can.

katcon

Peter,

You have not understood what I stated. So let me help you - indian justification for defense budget increase is just pretext for hegemonic intent. This stagging increase does not required considering its weaker neighbors and any attempt will to catch up to China is just a pointless waste of money. So ultimately its neighbors will stand to suffer from more of indian aggressive and repressive hegemonic actions.

Any if your suggestion is any indication, countries beyond indian neighborhood should watch out for indian hegemonic intent.

peter smith

Defence budget not for defence. Hmm. Then what is it for? I believe GOI is trying to stick with Finance Ministry's recommendation of 3% of GDP.

You are forgetting idune the sheer size of the Indian armed forces. Maintaining and upgrading world's largest army, 4th largest airforce, 5th largest navy is no child's play.

katcon

Regardless of any estimate or justification, indian defense budget is not for defense of india.

India already has overwhelming superiority over all its neighbors except China. Only indian hegemonic intent justifies such staggering increase in defense budget.

Now indian neighbors can expect more aggressive and repressive actions from india.

clocan

Pakistan's defence budget for 2008-2009 was also 'about 2%' of GDP. Not sure what numbers the ToI is using.

But such deliberate distortions of facts in some sections of the Indian media, to paint Pakistan in a negative light and perpetuate 'anti-Pakistan myth's' and anti-Pakistan sentiment within India are commonplace.

Anyway, that clarified, carry on.

salman

Which brings us all back to the point of this triangle consisting of China, India and Pakistan.

Pakistan cannot match India in terms of the budgetary allocations to defense and India cannot match China.

Rahul

guys, chill. the reason for hike is also due to increasing cost of fuel, cost of purchasing and maintaining wepaonry and also for increasing indian troop salaries.

and in case you havent noticed, lot of the indian armed forces equipment is old and obsolete. they have to be replaced to maintain credible deterrence in the future. so this hike is a move that any country would adopt in the situation we r in right now.

kevin parker

it wouldn't surprise me 2 no that india wud b spending $60billion on their defense by 2010,but it sure was shoking for me to read on the "wikipedia" tht pakistan is spending $7.50billion on their defnce in 2008.

India might well end up as a superpower, but i dont think tht pak needs to worry about that, cuz u all might fight 1000s of wars in kashmir, we might send 1000s of our troops to afghanistan, but its 21st century and war is the last answer of gaining independence.

omar sherif

Dude learn some manners before you start harping again with your frustrated mind. How many times in any of the previous conflicts, did china intervene? What makes you think that we see china as our master.

Stop ranting and post something constructive. Your increase in defence budget hasnt made us loose our sleep and we sure dont need any outside help in an event of conflict with You guys. We can take care of it on our own.

Kia del

I think hiking the defence budget to 2% of the GDP is a good move.

Possibility of war with China or Pakistan is highly unlikely though, but, the more you sweat in peace, the less you bleed at war. Thats what the Indians might be thinking.

san kaio

War is in no ones interest Indo-Pak war will not happen its the reality however some political rheotic will happen. Some terrorist strikes may happen but that is not war.

I do not think China will react in Indo-Pak war, Economic compulsions far out weigh military ones. However China will continue to supply military equipments to Pakistan as it see Pakistan as a reliable partner and that too due to economic reasons.

pakfriend

Defence budget is never a fixed figure. In most cases, its the budget relative to the threat. And with Pak and China threat, which has a combined defence budget of $60 Billion, it makes sense to have atleast $40 Billion. ($29.39 billion way less)

Also, there is very high probablity that China will react in an Indo-Pak War.
Pak, will obviously react in an Indo-China war, to support their master.

In any of the above two situations, Nuclear weapons will be used if there is loss of territory in any part of India.

The "No first use policy" is only for political reasons. In three years we will have the missile defence system, which china too does not have. And that's the strategic period to make a pre-emptive strike against Pakistani nuclear weapons. Even if some escape [Highly impossible, as pakistan does not have SLBM], we have to shield to take care of.

And for this, we will need highly accurate intelligence information.

intalk

two nuke subs ????? .. frm where .. i know one is coming frm russia .....

- for next two ATVs

for Next aircraft carrier & Admiral Gorshkov
in drdo R & D expense
big thing is the salaries part require bilions due to Sixth Pay Commission

pkdefence

two nuke subs ????? .. frm where .. i know one is coming frm russia ...

two aircraft carriers ???? everythig is going to gt finalised in this comin year ??.. out of these two one was already contracted and the provisions were made in the previous budgets if i am not mistaken

agni -V ,again listed for next year ..which again doesn't require billions

brahmos-2 , again in development process,

all the items you just mentioned have been there since long time and the previous budgets were catering to those needss..

sundefe

Two Nuke subs
Two Aircraft carrier
Agni-V
Bramhos-II
salaries

superhunk

mate ,35 percent is huuugeee considering the global fiscal climate.. i wonder what acquisition plans do they have for the upcoming year ..

tophoc

it is not as if they are going to sign mrca in the comin year .. so this might go unutilised .. it might be for infrastructure development arnd border areas otherwise uilisation doesn't justify 35 percent rise unless ofcourse they want to spend on sumthing like deployment in afghanistan where you need constant money flows .. just a speculation ..

hockzen

Why the 34% hike
The biggest Projet will be MRCA ($ 10 billion).
The Pay hike due to 6th pay commision.
The Army may finalise the Artillery which it need desperately.
The Contract will be signed for the Helicopters.

By the way it is still 2% of our GDP..so guys just Chill. I also like this money to be utilized.