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Procurement Data


The first full budget of the Modi government presented to Parliament on February 28, 2015 set aside Rs. 2,46,727 crore (US$ 40.4 billion) for defence, which amounts to a 7.7 per cent increase over the previous year’s allocation. The defence allocation is, however, exclusive of another Rs. 62,852.6 crore provided to the Ministry of Defence (MoD) under the heads of Defence Pensions (Rs. 54,500 crore) and Civil Expenditure of MoD (Rs. 8,852.6 crore), both of which do not form part of India’s official defence budget. The latest defence allocation comes in the wake of the Modi government’s all-out push for the ‘Make in India’ initiative, the ‘heart’ of which, as noted by the Prime Minister himself at the Aero India 2015, is the defence industry. The budget also comes in the wake of the government’s acceptance and implementation of the report of the 14th Finance Commission, which has made a number of recommendations that have a bearing on the central government’s budget, a significant portion of which is spent on defence.

The eight per cent growth in the defence budget has to be seen in the light of this development, although there would be plenty of disappointment for the armed forces which would have expected a double digit growth. This disappointment is mainly due to the ever widening gap between the resource requirement projected by the Ministry of Defence and what it is finally allotted in successive budgets. Suffice to mention that the gap, which was eight per cent (Rs. 12,453 crore) in 2009-10 increased to a mammoth 26 per cent (Rs.79,363 crore) in 2014-15 (Figure I). It can be assumed with a reasonable degree of certainty that the gap, both in percentage and absolute terms, would have further increased in 2015-16.

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