DEFENCE BUDGET 2022-23: STAYING THE COURSE FOR BETTER OR WORSE

While the hype over 68 percent of the capital procurement budget being earmarked for procurement from the domestic industry is understandable, omission of any reference to setting up of the non-lapsable fund for defence modernisation was surprising.

- Amit Cowshish

At ₹5.25 trillion, India’s total defence budget for the FY 2022-23 (FY23), including the allocation for defence pensions, represents a 9.82 percent increase over the current year’s (FY22) total outlay. This is considerably better than the year-on-year increase of 1.45 perent last year, but two other macro indicators are not as promising.

One, the allocation works out to 2.04 percent of the GDP, down from 2.15 percent in the FY22. This slide has not gone down well with a section of the strategic community which has long been arguing, for reasons that remain inadequately explained, that the defence budget should be pegged at 3 percent of the GDP. At one point, even the parliamentary Standing Committee on Defence was a strong votary of this idea, dismissing all notions that it was not feasible and, in any case, be of little use.

Two, the defence budget has declined from 13.73 percent of the total central government expenditure during the current year to 13.31 percent for the FY23. This is not surprising as the focus of the union budget is on capital expenditure in infrastructure and other sectors that have the potential of spurring growth. At ₹7.5 trillion, the allocation for total capital expenditure of the central government for the FY 23 is 35.37 percent more than the budget estimates of the current year.