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Defence modernisation budget rises just 5% each year in real terms

With customs duties imposed on defence in 2016 and GST in 2017, capex has fallen even more

Topics
Goods And Services Tax  |  Ministry Of Defence  |  Defence Budget

Ajai Shukla & Devangshu Datta 

A Business Standard analysis of defence capital allocations, the crucial component of the defence budget that buys new weapons and equipment, reveals that it has risen by barely 5 per cent in real terms each year, in the last decade. This is after accounting for inflation and foreign exchange rate variation (FERV).

Thus, the military’s modernisation budget has trailed far behind growth in the Gross Domestic Product (GDP), which has risen at 6-8 per cent annually for that period. Twice during this period, in 2012-13 and 2015-16, the adjusted capital budget was lower than ...

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First Published: Sun, February 10 2019. 23:40 IST
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