'Highest in 15 years': Nirmala Sitharaman allocates Rs 4.78 lakh cr for Defence Budget 2021-22
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New Delhi, Feb 1: In a situation where India is engaged in a prolonged standoff with China in eastern Ladakh, Finance Minister Nirmala Sitharaman on Monday announced an allocation of Rs 4,78,195.62 crore for the defence sector for 2021-22 as against last year's Rs 4,71,378 crore (including Defence Pension). Excluding pensions, it is pegged at Rs 3.62 lakh crore from last year's Rs 3.37 lakh crore.
Defence Minister Rajnath Singh thanked Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for increasing the defence budget to Rs 4.78 lakh crore for the financial year 2021-22 and termed it as the highest ever increase in capital outlay for defence in 15 years.
"I specially thank Prime Minister Narendra Modi and Finance Minister for increasing the defence budget to 4.78 lakh cr for FY21-22 which includes capital expenditure worth Rs 1.35 lakh crore. It is nearly19 percent increase in Defence capital expenditure. This is highest ever increase in capital outlay for defence in 15 years," Rajnath Singh said.
Modernisation fund for the armed forces has gone up from Rs 1,13,734 last year to Rs 1,35,060 crore for the financial year 2021-22. In the last year's budget, defence forces were provided Rs 20,776 crore additional funds under the capital budget meant for modernisation of armed forces. In 2020-21, the three defence forces were also given emergency procurement powers in view of the situation along the China border.
The Ministry of Defence said, "Allocation under Non-Salary Revenue to meet operational requirement has been increased to Rs 54,624.67 crore. This is 6 per cent growth over FY 2020-21."
It further added, "The Capital allocation for DRDO has been increased to Rs 11,375.50 crore. This is an increase of 8 per cent over 2020-21 and 8.5 per cent over 2019-20. The allocation for Border Roads Organisation (BRO) has been increased to Rs 6004.08 crore which is 7.48 per cent increase over FY 2021-22 and 14.49 per cent over FY 2019-20."
It further added, "The Capital allocation for DRDO has been increased to Rs 11,375.50 crore. This is an increase of 8 per cent over 2020-21 and 8.5 per cent over 2019-20. The allocation for Border Roads Organisation (BRO) has been increased to Rs 6004.08 crore which is 7.48 per cent increase over FY 2021-22 and 14.49 per cent over FY 2019-20."
This comes as Sitharaman on Monday announced that the fiscal deficit for FY21 has been pegged at 9.5 per cent of the GDP and will come down to 6.8 per cent in FY22. "The fiscal deficit will reach below 4.5 per cent by FY26", she said.
Sitharaman said while gross expenditure is seen at Rs 34.5 lakh crore, the capital expenditure is expected to be Rs 4.39 lakh crore in FY21. The government will approach the market for additional Rs 80,000 crore to fund the FY21 fiscal deficit, said the Finance Minister. She said the FY22 gross expenditure is seen at Rs 34.83 lakh crore and capital expenditure at 5.54 lakh crore.