India has the fourth largest military in the world. Yet despite this, Indian defence spending over the years has been in the the region of 2.5 per cent of GDP; and this year was no different. For the year 2006-07, the revised estimates for the defence budget were Rs 86,000 crore. The budget outlay for the year 2007-08 indicates that the allocations have been increased to Rs 96,000 crore — an increase of around 11per cent. Given an inflation rate of 5 to 6 per cent, the increase is marginal. The bottom line is that the Union finance minister has essentially protected the status quo.

So the big question then is this. When the need to maintain operational vigilance and military balance in the subcontinent has become a major imperative, is this outlay sufficient? The answer is both yes and no. Yes because despite India’s military budget having hovered on the lower side of 3 per cent of GDP, the country has still managed to modernise its Armed Forces to some extent. No because when we look at the global security scenario and look at the defence budget allocations of our neighbours, we definitely lag behind. Today Pakistan’s military budget is around 4 per cent of GDP and unofficial estimates of Chinese military budget also indicates the same figure.

Now going specifically to the budget Chidambaram presented on Wednesday, the increase in the outlay for individual services like the army, navy and air force is around 10 per cent. This means that the services will be able to undertake their modernisation plans but would find it difficult to pursue their envisaged growth programmes.

... contd.