Description of
Defence Budget
2017-18

CONTENTS.
 Preface.
 History of Defence Expenditure .
 Overview of Defence Budget 2017-18.
 Share of Defence Services in Defence Budget 2017-18.
 Budget Analysis.
 Modernization Budget of Armed forces.
 Comparative Statistics of Defence Budget 2016-17 & 2017-18 .
 Conclusion.

PREFACE…
• Budgets are the core heart of the govt. budgets are
the initial plan outs for the well being and smooth
running of a community or an human herd.
• Among those budget plans Defence budget plays an
efficient role. Defence budget can be said as, “the
portion of overall Union budget , allocated for the
funding of the Indian Armed Forces”.
• Defence budget are crucial and only dedicated to
the hero's of our country savers.

GRAPHICAL REPRESENTATION TO THE HISTORY OF
DEFENCE BUDGET.

Over View of 2017-18 Defence Budget
 Defence budget is hiked to 11% over last year.
 Defence expenditure excluding pension is set at ₹2.74 lakh
crore.
 The allocation is about 12.78% of total government
expenditure of ₹21.74 lakh crore.
 The capital acquisition component of the defence allocation
for the coming fiscal is just over ₹86,400 crore, compared to
about ₹78,500 crore last year. However, the Defence Ministry
had returned close to ₹36,000 crore of the funds allocated to
it for capital acquisition last year.

Budget Analysis…
• Honorable Finance Minister Mr. Arun Jaitley, took a lead
in presenting the Union Budget of 2017 on 1st day of
February 2017, to set out the government's policies for
the next year. Defence budget is one among that.
• An outlay of ₹ 2.74 lakh crore has been proposed as
budget estimates [BE] for the financial year 2017-18.
• The Defence outlay amounted to 12.77 per cent of the
total budget.

• In 2016-17 The capital preferences for 3 defence services to
purchase the new equipments, weapons, aircrafts, warships
and other military vehicles stood at ₹ 86,488 crore. As
compared to this fiscal year it is ₹ 78,586 crore.
• The money allocated for defence pension was ₹ 85,737 crore.
As compared to revised estimation it is ₹ 85,624 crore this
fiscal year.
• Budget documents show that revised capital budget for this
fiscal year is ₹ 71,700 crore, but it is not clear whether the
Defence Ministry was unable to spend the remaining amount
(₹ 6,886 crore) or whether any savings were done.

• The Defence Industry also welcomed the increased
capital expenditure .
• The Government has made an allocation for the Make
in India programmes and R&D, the capital expenditure
has seen a decline from 34.7% to 33.0% of the defence
budget.
• In between Defence budget, there are some small
allocation of ₹ 44.63 crore for prototype development
under ‘Make In India’ which has been recently revised
by MoD.

2016-17 (BE)
( ₹ in Crore)
2016-17 (AE)
( ₹ in Crore)
2017-18 (BE)
( ₹ in Crore)
% Increase in
2017-18 (BE)
over 2016-17
(BE)
Army* 21535 17812 20148 -6.4
Navy 21323 18993 18749 -12.1
Air Force 27556 26216 30885 12.1
Total 70414 63021 69783 -0.9
Modernization Budget of Armed forces
Note:* : Figures of Army are approximate.

2016-17 2017-18
Defence Budget
(Rs. in Crore)
249099.0 262389.8
Growth of Defence Budget (%) 0.96 5.34
Revenue Expenditure
(Rs. in Crore)
162759.0 175861
Growth of Revenue Expenditure
(%)
6.98 8.05
Share of Revenue Expenditure
in Defence Budget (%)
65.3 67.0
Capital Expenditure (Rs. in Crore) 86340.0 86528.7
Comparative Statistics of Defence Budget
2016-17 & 2017-18

Growth of Capital Expenditure (%) -8.7 0.22
Share of Capital Expenditure
in Defence Budget (%)
34.7 33.0
Capital Acquisition (Rs. in Crore) 70000 69783*
Growth of Capital Acquisition (%) -9.4 -0.3
Share of Defence Budget in GDP (%) 1.65 1.56
Share of Defence Budget
in Central Government Expenditure (%)
12.6 12.2
Defence Pension 82332.66 85740.00
MoD’s Budget (Rs. in Crore) 340921.98 359854.12
Growth in MoD’s Budget (%) 9.95 5.55
Share of MoD Budget in GDP (%) 2.26 2.14
Share of MoD Budget
in Central Government Expenditure (%)
17.24 16.76

• The meager increase of 5 % in the official defence
budget is grossly inadequate especially in view of the
vast voids existing in military capability and the
diminished and incremental effect on modernization
and operational preparedness.
• There is a need to augment resources substantially,
particularly under two critical heads of the defence
budget – stores and capital procurement – which
have come under severe pressure in the last several
years with a huge negative consequence on India’s
defence preparedness.
Conclusion