Address at the Inaugaral Session of the Seminar on Defence Budget

Defence budget accounts for a significant proportion of the central government expenditure. For the current year, the revenue and capital budgets of defence account for more than 20 and 80 per cent of the entire non-plan revenue and capital budget respectively of the central government. This translates into Rs 57,593 crores as revenue budget and Rs 48,007 crores as capital budget for defence. Allocation for defence has generally been the second largest single head of expenditure in the nonplan segment of the central budget. These allocations have always involved huge sums of money but there is a section of strategic thinkers who believe that the allocations for defence have generally been grossly inadequate. While this may or may not be true, the fact remains that the resources are limited, especially for meeting the increasing requirements under the revenue heads as revenue expenditure has a direct bearing on government’s statutory obligations under the Fiscal Responsibility and Budget Management Act. It is my assessment that the perception of inadequacy of allocations for defence is based largely on the crunch under this very head. At least in the recent years allocations under the capital head have not been a problem. These issues can best be understood if one looks at the budget trends and the potential resource base.

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