Appeasing the military: India’s defence budget swells to Rs2.24 trillion

NEW DELHI:

India’s embattled government, beset with an intimidating array of domestic challenges, raised the defence budget by 10 per cent for the fiscal year 2013-14.

In a speech trumpeting his government’s record on Monday, Finance Minister P Chidambaram announced that the defence budget was being raised to a staggering Rs2.24 trillion — with about Rs8.9 billion set aside for acquisitions by the armed forces and Rs1.34 trillion earmarked for payment of salaries and pensions and other expenses.

While revealing details of the interim budget, Chidambaram announced a package of cuts in indirect taxes in the budget for the next financial year starting April 1.

In comparison, Pakistan jacked up its defence spending by 15 per cent for the current fiscal year, raising it to Rs627.2 billion from a previous Rs545.3 billion, citing the ongoing war on terrorism.

Previously, the Indian government, engaged in a massive programme to upgrade the country’s ageing military hardware, increased defence spending to Rs1.93 trillion rupees ($40 billion) for the financial year that ended in March 31, 2013.

However, a potentially more costly-feature of the budget increase was the acceptance in principle of One Rank One Pension (OROP) – allowing three million veteran soldiers of the same rank and length of service to receive the same pension, regardless of their retirement year.

According to analysts, the budget was an interim exercise ahead of the election due by May which the government looks sets to lose. Members of the ruling Congress-led government will be asked to approve only the period until the new administration takes charge.

The Indian finance minister also boasted that he had slashed the fiscal deficit lower than the target, while unveiling a pre-election budget that political opponents said contained unrealistic calculations.

With additional input from the wires

Published in The Express Tribune, February 18^th, 2014.