Updated: India spending $3 billion additionally till March to beat China aggression in Ladakh

Photo: India’s finance minister Nirmala Sitharaman with the budget papers for 2021-22 fiscal.

New Delhi: Facing a challenge in Ladakh from China since May last, India will arm its defence forces be spending an additional $3 billion (Rs 21,000 crore) this fiscal ending Mar. 2021 to boost capabilities and plug gaps in weapons and military equipment.

For the same reason, and to meet the two-front threat posed by China and Pakistan, India today committed to a Rs 135,061 crore ($18.5 billion) on military modernisation (capital expenditure) to buy new weapons, platforms and equipment in the 2021-22 fiscal.

However, no details or break-up of the capital expenditure on the three armed forces — army, navy and air force — on new aircraft or warships or for dockyard infrastructure — were part of the defence budget documents.

But it can be easily estimated that India will be spending money on buying 83 locally-made ‘Tejas’ Light Combat Aircraft from state-run Hindustan Aeronautics Limited, and also spend money on the S-400 air defence missiles being bought from Russia, apart from paying for committed liabilities towards purchases made in previous years.

In all, Rs 478,196 crore ($65.55 billion) was allocated for the Ministry of Defence, including to meet the pension bill of Rs 115,850 crore ($15.9 billion) in the financial year from Apr. 2021 to Mar. 2022.


India’s Minister of Finance Nirmala Sitharaman, who had held the defence portfolio in Prime Minister Narendra Modi‘s first tenure, presented this annual estimates for 2021-22 in the Lok Sabha or the House of the People, the lower house in the bicameral parliamentary system.

The revenue expenditure (recurring expenses such as maintenance and fuel) has been pegged at Rs 232,047 crore ($31.8 billion) for the next fiscal. The pension-related expenditure has come down from this year’s revised estimates of Rs 125,000 crore ($17 billion), as the government had paid up arrears of the revised pensions, the defence ministry clarified later in the day.

Without taking into account the pension expenses, the defence budget for 2021-22 stood at Rs 347,088 crore ($47.4 billion). India had made a defence budgetary estimates of Rs 323,053 crore ($45.2 billion) for its armed forces till March 2021, during the budget announcement on Feb. 1, 2020. It was revised to Rs 343,822 crore ($47 billion) last month, an additional outlay of Rs 20,769 crore.

For the second consecutive year, Sitharaman failed to mention the budget allocations, as part of her budget speech, which had been a custom in the previous years. India’s military leadership has time and again acknowledged that the nation faces two threat from China and Pakistan, and the possibility of the two enemies colluding to wage a two-front war. All three nations in the neighbourhood are nuclear-armed.

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