Pravin Joshi

The Indian defence budget for FY 2006-07 is Rs 89, 000 crore (cr). This is 7.23 per cent more than the budget in FY 2004-05. As a percentage of GDP, the budget is 2.29 per cent as against 2.39 per cent in the previous year. Taking the revised allocation of Rs 81, 700 at RE (Revised Estimate) stage in FY 2004-05, the increase is 8.94 per cent.

• Published: March 07, 2006
• IDSA Comments

In India, the defence budgeting system is incremental and input-based. Yearly allocations of funds are made without reference to the defence plans. In effect, the budget does not get linked to any established goals or outputs. Resource planning beyond a one-year period is not carried out. Some have even called it an archaic system. The five-year defence plans have lost their utility for resource planning. This article brings out the shortcomings in the present budgeting system and recommends some options for a goal-oriented budgeting system.

• Published: October 2005
• Strategic Analysis