Defence Budget 2021: Rs 4.78 lakh crore allocated for defence, 19 percent increase in capital outlay

NEW DELHI: At a time Indian and Chinese troops are locked in a standoff in eastern Ladakh, the government on Monday increased the capital outlay for the armed forces by nearly 19 per cent while allocating a total of Rs 4.78 lakh crore for defence budget for 2021-22 as against Rs 4.71 lakh crore last year.

Rs 1.35 lakh crore has been set aside for capital expenditure that includes purchasing new weapons, aircraft, warships and other military hardware, according to the Union Budget presented in the Lok Sabha by Finance Minister Nirmala Sitharaman.



The capital outlay in the defence budget 2020-21 was Rs 1.13 lakh crore.

In a tweet, Defence Minister Rajnath Singh thanked Prime Minister Narendra Modi and Sitharaman for increasing the defence budget to Rs 4.78 lakh crore and said the nearly 19 per cent hike in the capital expenditure is the highest-ever increase in the last 15 years.

The defence minister also expressed happiness over Sitharaman’s budget proposal to open 100 new Sainik schools.

The total outlay of Rs 4.78 lakh crore included an allocation of Rs 1.15 lakh crore for payment of pensions. Significantly, the allocation for payment of pension has come down as it was Rs 1.33 lakh crore in the previous budget.

Excluding the pension outgo, the total revenue expenditure, which includes expenses on payment of salaries and maintenance of establishments, has been pegged at Rs 2.12 lakh crore.

Military experts expressed satisfaction on the overall allocation considering the adverse impact of the coronavirus-triggered pandemic on the economy, though, they said, India will have to gradually increase defence spending to deal with increasing external threats.

“I am satisfied with the total allocation to the armed forces considering the state of the economy in view of the impact of the coronavirus pandemic,” said Dr Laxman Behera of the Manohar Parrikar Institute for Defence Studies and Analyses.

He said the increase of around Rs 22,000 crore in capital outlay is a welcome move which will help the three services in carrying on with their modernisation drive.

“I specially thank PM and FM for increasing the defence budget to Rs 4.78 lakh cr for FY 21-22 which includes capital expenditure worth Rs 1.35 lakh crore. It is nearly 19 per cent increase in defence capital expenditure. This is the highest ever increase in capital outlay for defence in 15 yrs,” Defence Minister Singh tweeted.