Indian Defense Budget 2000-2001

Government of India announced budget for the year 2000-2001 on February 29, 2000.  The following note is intended to put the increase in Defense Budget in correct perspective.

Defense Budget: 2000 2001

  • Projected Defense Expenditure

Rs.58, 5870 million ($13.4 billion)

  • Percentage of GDP

2.68%

Defense Budget: 1999-2000

  • Allocated Expenditure

Rs.45, 6940 million ($10.5 billion)

  • Revised Estimates

Rs.48, 5040 million

The Defense Budget for 2000-2001 has an increase of 21% (Rs.10, 0830 million) over the revised estimates for the last year.  This percentage further needs to be adjusted against inflation as well as the depreciation of the Indian Rupees against the US Dollars to arrive at real percentage increase.

India's military expenditure as percentage of GDP for last 10 years has been consistent within a range declining from 3.6% in 1987-88, as shown below:

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2.8

2.6

2.4

2.5

2.4

2.3

2.3

2.4

2.2

2.28*

2.68

*revised 2.65%

  • 75% of India's defense budget is to be spent on pay & allowances, training, welfare and exercise.

  • Research and Development accounts for 5.3 % of overall allocation.  The expected expenditure on pensions itself is greater than the total naval budget.

  • Deployment of troops along the Line of Control (LOC) in Kargil sector to maintain peace has resulted in an increase of Rs.100 million a day compared to last year.  Expected expenditure on high altitude clothing and surveillance equipment in remote areas to curb cross border incursions.

  • Necessary expenditure expected on modernization and acquisition needs.

  • Welfare measures for the families of defense personnel killed in the Kargil operations and also a compensation package for soldiers who have suffered battle injuries.

  • Housing facilities for families and next to kin of soldiers killed in the operation, long term fixed deposits, education for children, and assisting in other problems faced by widows and parents of deceased soldiers.