New Delhi, Feb. 2: The Centre on Monday allocated Rs 4.78 lakh crore to Defence Budget to modernise the Armed Forces as it increased the capital outlay for the armed forces by nearly 19 per cent.

This follows escalating tensions with China along the Line of Actual Control (LAC) in eastern Ladakh. 

In the Union Budget 2021 presented by Nirmala Sitharaman, the Centre said Rs 1.35 lakh crore has been allocated to Defence Ministry for purchase of new weapons while Rs 1.15 lakh crore has been allocated for payment of pensions.

#Budget2021 gives historic push to defence modernisation by increasing defence capital outlay by 18.75%

Defence allocation in the budget increased to ₹4.78 lakh crore for the Financial Year 2021-22#AatmanirbharBharatKaBudget

Read: https://t.co/Lzl8jBJ0Vd

— PIB India (@PIB_India) February 1, 2021

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.

Three components of defence budget

“Defence Budget consists of three component – revenue, pension and capital component. The Budget allocation (for the capital component) in 2020-21 was Rs 1,13,734 crores. It has gone to Rs 1,35,060 crores which is an increase of 20 per cent,” T.V. Somanathan, secretary, expenditure said.

Rajnath Singh thanks Modi and Sitharaman 

Lauding the finance ministry’s decision, defence minister Rajnath Singh thanked Prime Minister Narendra Modi and Sitharaman. 

I specially thank PM& FM 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 15yrs

— Rajnath Singh (@rajnathsingh) February 1, 2021

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

“People hadn’t expected a Budget of this kind because, in a way, the government had presented 5 mini-budgets earlier. Several packages were announced, of which Atma Nirbhar Bharat is also a part. It’s a superb Budget. The more it is praised, the less it is,” Rajnath said.

During the challenging times of COVID-Pandemic the FM had presented five mini-budgets in the form of packages in 2020. This Budget is the biggest addition in that series. This Budget is unprecedented in many ways and it will strengthen the sankalp of ‘Atmanirbhar Bharat’.

— Rajnath Singh (@rajnathsingh) February 1, 2021

Meanwhile, military experts expressed satisfaction on the overall allocation considering the adverse impact of the coronavirus-triggered pandemic on the economy. However, they said that 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.