Budget 2021: FM allocates Rs 4.78 lakh crore to defence ministry

Finance Minister Nirmala Sitharaman has allotted Rs 4.78 lakh crore to Ministry of Defence in the Union Budget for 2021-22 as against Rs 4.71 lakh crore in the previous year.

Out of this, Rs 1.35 lakh crore has been allotted towards capital expenditure, which relates to modernisation and infrastructure development of armed forces. While the budgeted estimate for capital expenditure in 2020-21 was Rs 1.13 lakh crore, it has been revised to Rs 1.34 lakh crore amidst the border tensions with China.

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"The allocation under capital of Rs 1,35,060.72 crore for FY 2021-22 represents an increase of 18.75 per cent over FY 2020-21 and 30.62 per cent over FY 2019-20. This is the highest ever increase in capital outlay of defence in the last 15 years," the Defence Ministry said in a statement.  

Excluding defence pension, the total allocations for the ministry for 2021-22 is at Rs 3.62 lakh crore, which is an increase of Rs 24,792.62 crore over 2020-21.

Defence pension has been revised to Rs 1.25 lakh crore for 2020-21 from the budgeted estimate of Rs 1.33 lakh crore. In FY22, defence pension has been budgeted at Rs 1.15 lakh crore.

"The capital allocation for DRDO has been increased to Rs 11,375.50 crore. This is an increase of 8 per cent over 2020-21 and 8.5 per cent over 2019-20. The allocation for Border Roads Organisation (BRO) has been increased to Rs 6,004.08 crore which is 7.48 per cent increase over FY 2021-22 and 14.49 per cent over FY 2019-20," the statement said.

In a tweet, Defence Minister Rajnath Singh thanked Prime Minister Narendra Modi and the finance minister for the 19 per cent increase in defence capital expenditure.

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

Praising the Budget, he said, it will usher India into a new era of inclusive growth and prosperity.

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