NEW DELHI: Indian Finance Minister Yashwant Sinha announced a 28.2 per cent defence budget increase, the biggest ever, to $13.5 billion for the year beginning on April 1.
Presenting his annual budget to parliament on Tuesday, Sinha said defence allocation would be raised by Rs 130 billion ($3 billion) to Rs 586 billion. "This represents the largest ever increase in the defence budget in any single year," Sinha said, adding that "more will be provided whenever needed."
The increase is likely to fuel international concerns over escalating tensions between India and Pakistan. Stressing that there "cannot be any compromise on defence," Sinha said Indian troops had demonstrated they were "second to none in the world" during last year's military conflict in the Kargil sector in Kashmir with Pakistan. "We shall not shrink from making any sacrifice to guard and protect every inch of our beloved motherland," he said.
Indian Prime Minister Atal Behari Vajpayee said "security reasons" had necessitated the dramatic increase in military spending, which has stagnated at 2.3 per cent of gross domestic product for more than a decade. "I am confident that the people of the country will try and understand the security requirements," Vajpayee told reporters after the budget was unveiled.
Vajpayee said that defence spending had been raised sharply because the security situation was deteriorating. "The security environment has deteriorated after the Kargil war and we have to meet the challenge," he said.
India's defence budget last year saw a modest increase of 10.9 per cent just about keeping in step with inflation. The 1.3-million-strong army, which bore the brunt of the Kargil offensive last summer, received the largest slice of the defence budget, with Sinha increasing its share by $543 million to $6.7 billion for 2000-2001.
The air force was given a hike of $403 million to $1.83 billion, which dimmed its hopes of picking up much-needed advanced jet trainers worth $1.16 billion. The Indian navy's annual spending was increased by $163 million to $939 million.
Military analysts said the spending increase was largely justified given relatively low levels of military expenditure in the past. "This increase was expected and is in keeping with the problems faced by the armed forces during the war at Kargil," said Sujit Dutta of the Indian Institute of Defence Analysis and Studies (IDSA).
"This defence budget tries to compensate for the low level of military expenditure seen in India since 1987," Dutta said. "But we do not think that even this increase will compensate for the shortfalls in the capital expenditure that has accumulated over the years," Dutta warned.
Besides the airforce's demand for trainer jets, the army too wants T-90 tanks worth $930 million and the navy wants $300 million for a Russian aircraft carrier. Military research units are fighting for a rise in their $654 million budget for the mass production of ballistic missiles.
Dismissing the prospect of international censure, the analysts pointed out that India's military spending was still lower than equivalent expenditure some neighbouring countries such as China and Pakistan. "They have been spending well over three per cent of their GDP for years, so where is this question of international concern arising from?" said Dutta, who is also a specialist on Sino-Indian relations.
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