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INDIAN DEFENCE BUDGET 2017-18: AN ANALYSIS

Modernization of the Armed Forces is a continuous process based on threat perception, operational necessity, technological changes etc. however, the resources allocation has been inadequate over the years to address the needs of the Armed Forces.

The Budget proposal for 2017-18 maintained a 'small' hike of about 6.2 percent in defence spending and announced an allocation of Rs 2,74,114 Crores against last year  Rs 2,58,589 Crores. The increase is about Rs 15,525 Crores over the budgetary allocation for the year 2016-17. It does not include the pensions bill of about Rs 85,000 Crores. The Budget increase is in consistent with past increases and is likely to be less than 1.62% of GDP.

The increase in the share of the revenue expenditure is primarily due to the hike in the manpower cost of the Armed Forces.

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