India's defence spending

Finance Minister Arun Jaitley had hinted that the budgetary outlay for defence and security could go up, during a speech at a State Bank of India conference in Mumbai on September 28.

"In India, in addition to all global events which leave an impact on us, we also have the security challenge. This involves an element of uncertainty. It also involves a lot of national resources being diverted in that direction and it will always get top priority," the FM said.

He also touched upon the threat from the Islamic State (IS). "You have the uncertainty and the huge challenge created the world over by what is happening in large parts of the world on account of the activities and dangers posed by the IS. A global economy cannot be delinked from it," said Jaitley.

The FM's reference to defence allocation comes in a year when military pensions soared to Rs 82,000 crore, mainly due to the 'One-Rank, One-Pension' scheme.

Exactly what part of the defence budget needs to be increased? The Union Budget for 2017-18 will have an answer.

While the growth of capital expenditure has fluctuated over the years, it has remained almost constant in relation to the size of the defence budget. Will this pattern repeat itself in the coming Budget as well?