India spent 2.15% of GDP on defence in 2021

As the standoff with China continues on Eastern Ladakh, the Indian military is keenly awaiting an enhanced budget to modernise its troops. This, even after last year's emergency purchases of close to Rs 30,000 crores, to meet its defence preparedness following Chinese aggression on the border.

India is on the list of the top five biggest spenders on defence, after the UK, Russia, China and the US.

With a larger budget, the Army would be better able to provide its soldiers with the best weapons, from assault rifles to light utility helicopters, the latter being a lifeline for soldiers posted at the world’s highest battlefield, the inhospitable Siachen Glacier.

Similarly, the Navy would speed up its long term plan for having 170 ships and submarines. It also faces a critical requirement for minesweeper vessels, as it only operates two minesweepers to protect its sea lanes and ports. And, the Air Force is expecting to reach a strength of 35-fighter squadrons.

The military also awaits non-lapsable funds to plan their long term acquisitions. It has been its long-pending demand of the Indian military.

In last year's budget, capital outlay, which was meant for modernisation, increased from Rs 1,13,734 crore to Rs 1,35,061 crore, over 18.50 per cent from the previous budget (2019-2020).

The armed forces received Rs 21,326 crore more than the previous year to purchase several critical types of equipment, including armoured vehicles, assault rifles and missiles to counter Chinese aggression. The Indian Navy got the largest hike among the three services. The Navy's share was Rs 33,253.55 crore, while the IAF got Rs 53,214.77 crore and the Army received Rs 36,481.9 crore.

Last year's defence budget, which is over 13 per cent of the total budget, was also 2.15 per cent of the country's GDP.

However, the Indian armed forces often point out that the budgetary allocations have always been half of their projected demands, as the majority of its budgetary allocation goes in salary and pensions payments.

Last year it earmarked Rs 70,000 crores for domestic defence purchases. Emphasis was on promoting the local defence industry including start-ups. In an effort to push defence indigenisation, the MoD in May last year had approved restrictions on the import of an additional 108 military weapons and systems such as next-generation corvettes, airborne early warning systems, tank engines and radars under a staggered timeline of four-and-half years. The first negative list for defence imports comprising 101 items that included towed artillery guns, short-range surface-to-air missiles, cruise missiles and offshore patrol vessels was issued last August 2020.

Indian defence got close to 14 per of its (total government budget) total budgetary allocation of the government of India. The MoD budget estimate for FY 2021-22 amounted to Rs 4.78 lakh crore, only a 1.4 per cent increase over the previous year. But only 29 per cent was there for its modernisation and the rest was spent on salaries and pensions. In this allocation, the capital outlay had been enhanced to 1.35 lakh crore, a jump of almost 19 per cent, which is meant for modernisation.

In the past few years, India has been one of the biggest importers of defence equipment in the world. But with a focus on Make In India, efforts are on to reduce our dependence on imports. Besides, several measures are also being taken towards export. And export of the BrahMos missile system to the Philippines is a welcome step on the path.

In a recent reply in parliament, the Ministry of defence claimed that India had exported defence equipment worth Rs 8,434 crore in 2020-21, compared to Rs 1,940 crore in 2014-15. In 2020, the MoD targeted defence exports of Rs 35,000 crore ($5 billion) till 2024.