NEW DELHI: India announced yesterday a hefty 34 percent hike in its defense budget for the upcoming fiscal year as its army fast-tracks acquisitions following the Mumbai militant attacks.
Finance Minister Pranab Mukherjee attributed the increase, the steepest in recent years, to fallout from last November’s attacks in Mumbai by gunmen who India says came from nuclear-rival Pakistan.
“We are going through tough times. The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism,” Mukherjee said in presenting an interim budget to parliament.
Saying a “threshold has been crossed” with the Mumbai terror attacks, Mukherjee hiked the allocation for defense by 34 percent to Rs.141,703 crore (Rs.1.417 trillion) in the interim budget for 2009-10 he presented in the Lok Sabha yesterday.
The allocation is nearly 15 percent of the total interim budget of Rs.953,231 crore for the fiscal beginning April 1. The interim budget was presented as the government in now at the fag end of its tenure and general elections are due in April-May.
As in the past, the 1.1 million strong Indian Army has received the lion’s share of 41 percent or Rs.58,648 crore, with the Indian Navy being allocated Rs.8,322 crore and the Indian Air Force Rs.14,318 crore.
In real terms, however, the budgetary hike works out to only 23.6 percent as the revised expenditure for 2008-09 has been placed at Rs.114,600 crore against the allocation of Rs.105,600 crore, said Mukherjee, who was presenting the budget on behalf of Prime Minister Manmohan Singh, who is recovering from coronary bypass surgery.
Of the allocation for the fiscal beginning April 1, plan expenditure has been pegged at Rs.86,879 crore against Rs.73,600 crore for the financial year just ending.
