Defence spending up by 11.6 per cent

India's defence budget will go up by a modest 11.6 per cent in the next fiscal from Rs 1.51 lakh crores in the current financial year to Rs 1.64 crores, Finance Minister Pranab Mukherjee announced while presenting the Union budget.

A major chunk of Rs 69,198 will go to capital expenditure for the acquisition of arms and modernisation, he said while vowing that any further requirement for the country's defence would be met. The defence expenditure accounts for one- seventh of the total Union budget.

The Rs 8366 crores hike in capital expenditure, which is 12 per cent more than this year's Rs 60,833 crores, comes at a time when the government is looking to finalise big ticket deals. Of the total budgetary allocation for 2010- 11, the Army has been granted Rs 64,251 crores, Navy Rs 10,589 crores, Air Force Rs 15,928 crores and DRDO Rs 5,624 crores.

From the Rs 69,199 crores capital outlay, the Army got Rs 18,986 crores, Navy Rs 5,688 crores, Naval Fleet Rs 7,320 crores and Air Force Rs 30,699 crores. Commenting on the allocation, Minister of State for Defence M. M. Pallam Raju told reporters that its was a " substantial" increase for his ministry in view of the Rs 69,918 crores capital outlay.

Defence experts, however, believe that since around 60 per cent of the capital acquisition budget would go for committed liabilities (on account of contracts that have already been signed), only Rs. 18,000 to 21,000 will be available for new schemes. L. K. Behera at the Institute of Defence Studies and Analysis (IDSA) says this amount was not enough in view of the some big- ticket items likely to be purchased in the coming year.

These include the 126 Medium Multi-Role Combat Aircraft MMRCA (estimated to cost $ 11 billion), the C- 17 Globemaster (estimated cost of $ 5.8 billion), 197 light helicopter and the 145 Ultralight Howitzers for the Army.

FOREIGN MINISTR: The total budget of the External Affairs Ministry has been slashed to Rs 7106 crores for 2011- 12 from Rs 7120 allocated for the current year. The axe has fallen on the special diplomatic expenditure (discretionary funds), which have been slashed from Rs 1300 crores to Rs 1200 crores. Keeping in the view India's rising global power, an amount of Rs 574.38 crores has been set aside for international commitments and contributions to international bodies.