Indian army during military parade (photo : Hindustan Times)
NEW DELHI (PTI): With some major deals expected to be clinched this year, Government Monday substantially raised its defence budget by 11.6 per cent to Rs 1,64,415 crore for 2011-12 from last year's Rs 1,47,344 crore.Of the total outlay, Rs 69,199 crore has been allocated for the acquisition of modern and new weapon systems, Finance Minister Pranab Mukherjee said, presenting the Budget in Lok Sabha.
However, the hike is 8.47 per cent on the basis of revised estimates of Rs 1,51,582 crore for the same year.
With several big ticket deals to likely to be finalised this year, the capital expenditure for defence forces has been hiked by Rs 8,366 crore from Rs 60,833 to Rs 69,199 crore.
Defence Ministry sources said the 13.75 per cent hike in capital expenditure has been made keeping in mind the big ticket deals to procure 126 multi-role combat aircraft, 197 light helicopters, 145 Ultra-light Howitzers and C-17 heavy-lift aircraft.
These deals are likely to be signed this year.
From the Rs 69,199 crore capital outlay, the Army got around Rs 18,988 crore, Navy Rs 5,688 crore, Naval Fleet Rs 7,320 crore and Air Force Rs 29,722 crore.
The largest share of the increased capital expenditure would go to the IAF, which will spend Rs 22,055 crore for procuring fighter and transport aircraft and helicopters of different types and origin in this decade.
India has plans of spending over USD 100 billion on defence acquisitions in the next five to 10 years.
The Finance Minister also said the Government is ready to provide any additional support saying, "Needless to say, any further requirement for the country's defence would be met.
"Of the total revenue expenditure of Rs 95,216 crore allocation for the next fiscal, the Army has been granted Rs 64,251 crore, Navy Rs 10,589 crore, Air Force Rs 15,928 crore and DRDO Rs 5,624 crore.
Sources said the defence budget accounts for the 13.07 per cent of the total expenditure to be made by the Central government in the next fiscal.
Terming the hike in allocation for his Ministry as "good and positive", Defence Minister A K Antony said, "we welcome it as our concerns have been by and large addressed and Finance Minister has stated that if we have any fresh requirements, it would be made up without any difficulty."
Despite the hike of Rs 17,071 crore, the defence expenditure continues to hover around the 2.5 per cent mark of country's GDP and remains much less than the percentage of it spent by adversaries China and Pakistan.
India is world's tenth largest defence spender and its acquisitions account for around 2 per cent of the world's total spending on weapons and arms.
China and Pakistan are estimated to be spending over USD 90 billion and USD 10 billion respectively on their military modernisation annually.The government has also earmarked Rs 118 crore for prototype development under make category in this budget, which is likely to be shared between both private and public sector concerns in the defence sector.
After the 1971 war, the Defence Ministry has for the first time utilised the full budget of Rs 60,000 crore for capital acquisitions. For 2009-10, the ministry had returned Rs 5,539 crore unspent.