Pranab hikes Defence Budget by 35 per cent

New Delhi: Considering the changed security scenario in view of the Mumbai terror attacks, the Government on Monday allocated Rs 1,41,703 crore for defence sector, almost a 35 per cent increase from the previous year's Budget provisions.

Last year's allocation for defence stood at Rs 1,05,600 crore and the current increase amounted to Rs 36,103 crore.

Presenting the Interim Budget for 2009-10 in the Lok Sabha, External Affairs Minister Pranab Mukherjee, who is presently also in-charge of the Finance Ministry, said the allocation has been increased because of the prevailing security environment, which has "deteriorated considerably."

Noting that the Mumbai attacks had amounted to the threshold being crossed on the security front, Mukherjee said, "We are going through tough times. The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism."

With the total revised expenditure for defence last year standing at Rs 1,14,600 crore, he said the increased Plan expenditure for Defence this year would be Rs 86,879 crore. Last year's Plan expenditure was only Rs 73,600 crore, thereby providing an increase of Rs 13,279 crore this year.

The increased allocation this year would include Rs 54,824 crore for capital expenditure as against Rs 41,000 crore in the revised estimates for 2008-09, Mukherjee said.

However, the government would provide for any additional requirement for the security of the nation, he added.

The increased allocation for defence assumes significance as the government has decided to go on fast track acquisition of defence equipment.

The armed forces have already prepared a long list of equipment, mainly for its special forces commandos, to be bought under the fast track process.

After the Mumbai attacks, the government has initiated a massive revamp of the security structure of the country, which includes creation of a Coastal Command.

Despite the nearly 35 per cent increase this year, India's defence spending is still at about two per cent of the GDP, compared to China's seven per cent and Pakistan's five per cent.