Union Finance Minister Nirmala Sitharaman

On 1 Feb 2021, Indian Finance Minister Nirmala Sitharaman presented the Union Budget for 2021-22. During her speech, she missed the mention of the exact amount to be spent on defence budget. This surprised many as Indian Armed Force are entangled into a military standoff with China on LAC in the Ladakh area and defence watchers were expecting a sharp increase of minimum six or seven percent.

This satellite photo provided by Planet Labs shows the Galwan Valley area in the Ladakh region near the Line of Actual Control.
This satellite photo provided by Planet Labs shows the Galwan Valley area in the Ladakh region near the Line of Actual Control. | PC : AP

Answering the question why the finance minister chooses not to mention the defence budget allocation during her speech, the NITI Aayog Vice-Chairman Mr Rajiv Kumar stated that the current budget focused on developmental agenda and that’s why defence budget was not included in the budget speech which was focused on six pillars of good governance.

The latest reports emerging from the Finance ministry suggest that Rs 4.78 lakh crores have been allotted to the defence ministry which is a minor increase of 1.37 percent in comparison to last year’s budget allocation of Rs 4.71 lakh crore during the previous year.

However, the defence ministry has still got a major boost as the allocated Rs 4.78 lakh crores for year 21-22 includes capital expenditure worth Rs 1.35 lakh crore which has increased nearly 19 percent. The capital expenditure is the money India will be used to purchase new weapon systems. It was due to this factor Defence Minister Rajnath Singh expressed his gratitude to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for increasing the defence budget. He further added that the increase of nearly 19 percent in Defence capital expenditure is highest ever increase in capital outlay for defence in the last 15 years. Additionally, this also does not include the infrastructure developments like roads and highways which will be financed from the budget allocation of other ministries. This marks a positive trend as due to increasing belligerence of China, India will need to strengthen its defence and invest massive amount to safeguard its borders from the duel threat of Pakistan- China axis.

FM Nirmala Sitaraman
FM Nirmala Sitaraman | Pic Credit : deccanchronicle

Finally, Team Guarding India is yet to formally receive and analyse defence outlay. However, the current trend is a positive one and shows that despite immense economic difficulties, the government remains committed to moving ahead with the modernization of defence forces.