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Budget 2018: Govt hikes defence budget by 7.81% to Rs 2.95 trillion

The outlay for defence budget amounted to 12.10 per cent of the total budget of Rs 24.42 trillion for 2018-19

Press Trust of India  |  New Delhi 

Army, soldiers, BSF, jawans, defence, security forces, border
Illustration: Ajay Mohanty

An outlay of  Rs 2.95 trillion (Rs 2.95 lakh crore) was today set aside for the for the next fiscal which is an increase of 7.81 per cent over last year's Rs 2.74 trillion (Rs 2.74 lakh crore).

Out of the total allocation, the capital outlay for the three services for purchase of new weapons, aircraft, warships and other military hardware has been pegged at Rs 99,947 crore.

The outlay for amounted to 12.10 per cent of the total of Rs 24.42 trillion (Rs 24,42,213 crore) for 2018-19.

In his speech, Finance Minister Arun Jaitley appreciated the role played by the armed forces in meeting challenges on the country's borders as well as in managing the internal security environment, both in Jammu and Kashmir and the Northeast.

He said the government will develop two industrial production corridors and bring out an industry- friendly military production policy to promote the domestic industry.


Compared to revised estimate of Rs 2.79 trillion (Rs 2.79 lakh crore) for the in 2017-18, the increase in allocation has been 5.91 per cent but compared to the outlay of  Rs  2.74 trillion (Rs 2.74 lakh crore), the hike is 7.81 per cent.

Out of Rs 2.95 trillion (Rs 2,95,511 crore) allocated for the financial year 2018-19, Rs 999.47 billion (Rs 99,947 crore) has been pegged for capital outlay which includes expenditure on modernisation of the three forces, according to the ministry.

The revenue expenditure, which covers payment of salary, maintenance of establishments and other related expenditure, has been pegged at Rs 1.95 trillion (Rs 1,95,947 crore).

A separate amount of Rs 1.08 trillion (Rs 1,08,853 crore) has been set aside over the above the total allocation for the paying pension to personnel.

The amount for pension is an increase of 26.60 per cent over the allocation of Rs 857.4 billion (Rs 85,740 crore) last year.

In his address, Jaitley said a lot of emphasis had been laid on modernising and enhancing the operational capability of the forces in the last three-and-half years.


"The government will take measures to develop two industrial production corridors in the country," he said.

Jaitley said the government would also bring out an industry-friendly "production policy 2018" to promote domestic production by the public sector, private sector and MSMEs.

He said a number of initiatives had been taken to develop and nurture India's intrinsic production capability to make the nation self-reliant on its needs.

The minister said private investment in production had been opened up, including liberalising foreign direct investment.

First Published: Thu, February 01 2018. 16:21 IST
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