The defence budget remained unchanged at Rs 3.18 lakh crore,the amount set aside in the interim budget in February, notwithstandingexpectations of steep hike in resources to modernise the armed forces and procurecritical military platforms.

The allocation made in the Union Budget is an increase of6.87 per cent over revised estimates of Rs 2.98 lakh crore given in 2018-19. Theallocation of Rs 3.18 lakh crore has been estimated at around 1.6 per cent ofthe GDP which, according to experts, is lowest since the 1962 war with China.Inthe interim budget presented on February 1, the defence budget was pegged at Rs3.18 lakh crore and there was no change in the allocation.

In a significant move, import of defence equipment notmanufactured in India has been exempted from basic customs duty by FinanceMinister Nirmala Sitharaman.She said defence has an immediate requirement ofmodernisation and it is a “national priority”.

“This will have an impact of augmenting the defence budgetby approximately Rs 25,000 crore on account of savings in expenditure oncustoms duty over the next five years,” the defence ministry said. In the wakeof the Balakot strikes and China aggressively modernising its armed forces,there were expectations from the three services allocation will besignificantly hiked by Sitharaman, who was defence minister in the previousgovernment. The capital allocation is not adequate to modernise the armedforces. Everyone was expecting a significant hike in allocation, butunfortunately it did not happen,” said Laxman Behera of Institute of Defence Studies and Analysis. Out of thetotal allocation, Rs 1,08,248 crore has been set aside for capital outlay topurchase new weapons, platforms and military hardware. The revenue expenditurewhich includes expenses on payment of salaries and maintenance ofestablishments has been pegged at Rs 2,10,682 crore as against Rs 1,88,118crore for 2018-19.