Union minister of state for defence Ajay Bhatt told Parliament on Monday that the defence expenditure as a percentage of gross domestic product (GDP) had declined since 2014, due to an increasing trend in the country’s economic growth.
MoS Bhatt was replying to a question asked by leader of opposition Mallikarjun Kharge if the government was aware of the decline in expenditure under the defence ministry.
“It is seen from the above data that defence expenditure as a percentage of GDP may appear to be decreasing due to increasing trend in the growth of GDP. However, defence expenditure is increasing in absolute terms, implying higher spending”, Bhatt said in a reply to LoP Kharge.
Kharge also asked if the government was considering to create a non-lapsable defence capital fund account to ease and streamline multi-year capital acquisition processes, MoS Bhatt said, “Government is considering to create a non-lapsable defence capital fund account to ease and streamline multi-year capital acquisition processes.”
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In the union budget, the government had allocated ₹2.95 lakh crore to defence forces which is estimated to be around 1.58% of the country’s GDP.
A separate allocation of ₹1.08 lakh crore was set aside for defence pensions.
In 2020-21, the ministry of defence was allocated ₹4,71,378 crore that included expenditure for salaries of armed forces and civilians, pensions, modernisation of armed forces, production establishments, maintenance and research and development organisations.
This allocation was by far the highest allocation among all ministries of the central government.
The expenditure on defence constitutes 15.5% of the central government’s budget and 2.1% of India’s estimated GDP for 2020-21.
However, in this year’s budget, the ministry of defence was allocated a total budget of ₹5.25 lakh crore, which is 13.31% of the total budget.
This includes an amount of ₹1.19 lakh crore for defence pensions.