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DEFENCE EXPENDITURE

Focus: GS-III Indian Economy, Internal Security

Why in news?

It may be seen from  data of economic survey that Defence Budget as a percentage of GDP may appear to be decreasing due to increasing trend in the growth of GDP. However, it is increasing in absolute terms, implying higher spending.

Details

  • The Indian Army, given its overwhelming size, continues to be the biggest stakeholder in the defence budget.
  • Among the three forces, army has, however, the lowest capital share.
  • Furthermore, its capital share has seen a decline, from a high of 26 per cent in 2007-08 to 18 per cent in 2020-21, largely due to increase in P&A, which accounts for 70 per cent of its total revenue expenditure and 57 per cent of the total budget in 2020-21.
  • The army’s increase in the revenue share is a cause of concern considering its attempt to shift to the higher side of the technology-driven warfare which requires a much greater spend on capital assets.
Budget 2020 Share of Defence Services Army Air Force Navy India Army Defence Budget
  • Note: Army includes Military Farms, Ex-Servicemen Contributory Heath Scheme (ECHS), Directorate General Quality Assurance (DGQA), Rashtriya Rifles, and National Cadet Corps (NCC). Navy includes Joint Staff.
March 2024
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