Why is Share of Defence Budget in GDP Lowest Since 1962? High Economic Growth, Answers Minister

New Delhi: The government on Monday said the defence budget as a percentage of the Gross Domestic Product may appear to be decreasing due to an increasing trend of GDP growth of the country.

In the Union budget, the government had allocated Rs 2.95 lakh crore to defence forces which is estimated to be around 1.58 per cent of the country's GDP. A separate allocation of Rs 1.08 lakh crore was set aside for defence pensions.

This defence budget, in terms of percentage of the GDP, was lowest since 1962.

Replying to a question in Rajya Sabha, Minister of State for Defence Subhash Bhamre said the defence budget, including allocation for miscellaneous expenditure and pensions, was Rs 4.04 lakh crore, which is 16.6 per cent of total expenditure of government for the year 2018-

"Further, capital budget of ministry of Defence for 2018-19 is approximately 33 per cent of the total capital expenditure of the central government," Bhamre said

He said, "Defence budget as a percentage of GDP may appear to be decreasing due to increasing trend in the growth of GDP."

In March, the Parliamentary Standing Committee on Defence, headed by BJP MP Maj Gen (retd) B C Khanduri, had come down hard on the government for inadequate allocation of funds to the Army, Navy and the Air Force.

The Army had told the panel that it was reeling under severe financial crunch and struggling to even make emergency procurement when China and Pakistan were carrying out modernisation of their defence forces in "full swing".

The then Vice Chief of Army Staff Lt Gen Sarath Chand had told the parliamentary panel that inadequate allocation of funds in the defence budget for 2018-19 will hit the Army's modernisation plan even as the Chinese military was competing to reach the level of the US.

In the Rajya Sabha, Bhamre said allocated budgetary resources are optimally utilised towards meeting the operational requirements of the armed forces.

"Depending upon the allocated resources schemes are also reprioritised to ensure that urgent and critical capabilities are acquired without compromise of operational preparedness," he said.