Defence budget of India increases by 2.36 billion USD

[$@rJen]

12.7 Billion USD is included in the total amount of 40.5 Billion USD.

Thanks... But i think pesions are excluded from this right!!

 

[Sloth 22]

Thanks... But i think pesions are excluded from this right!!

Yes the Pension, for ex-soldiers, or now civilians cannot be called defence budget.

 

[nik141993]

total defence Budget is 54 billion$ including 90,000 cr for pension

 

[schoolboy]

The 12.7 Billion USD amount known as capital budget is for newer purchases , it is not spent on payment of deals which already are signed.Their allocation is separate.

For example , we have paid 15% of Rafale deal amount last year's as first advance payment and will pay 25% of deal this year as 2nd advance payment. This payment has its separate allocation and the capital budget or 12.7 Billion USD for this year won't be used for it.

You simply have no idea of how the defense budget works - and then post erroneous conclusions.

Earlier you had no idea what defense pensions were and tried to cast aspersion on a perfectly good article simply because you did not understand that defense pensions are accounted under a distinct head. Here's that exchange - for benefit of others who read this thread

https://defence.pk/threads/defence-...rcent-hke-to-56-bn.475207/page-3#post-9160938

Now on this thread, you continue to post nonsense about capital expenditure.

So here's a short take for those who have an interest in these things:

The defense budget excluding defense pensions (about 0.90 lakh crores - a significant amount) as well as amounts spent on NCC, BRO, Coast Guard, etc. is Rs. 2.74 lakh crore. As a matter of fact these extra items were customarily included in the defense budget till 2016-17 when Jaitley first made that change. There are many theories why - my guess is he wanted the defense budget to show a higher capex : revenue exp. ratio.

Now this Rs. 2.74 lakh crore has allocation for capital expenditure and revenue expenditure.

Capital expenditure outlay is Rs. 0.86 lakh crore, rest Rs 1.88 lakh crore is Revenue expenditure (salaries, routine maintenance, commonly used items, etc.).

Between 80 to 90% of this capex allocation (depending on estimates) is towards pre-committed (or contracted) capital expenditure - i.e. liabilities to be paid in this fiscal year on account of contracted acquisition - i.e. Rafaeles, submarines, tanks, transport aircraft, etc. In other words the Rafaele instalment to be paid this year will very much come out of the capex outlay of Rs 0.86 lakh crores.

The remaining 10-20% is basically a contingency head in case sudden or urgent acquisition is needed (such as the occurrence of a Kargil-like event). In most years the contingency (or non-plan) portion is not utilised prompting commentators to say that the government has not utilised its defense allocation entirely - which is also misleading.

Peaceful Republic of India continues to have one of the lowest Defence to GDP ratio , at just 1.73 %.

Defense to GDP spending is meaningless if we do not know what percentage of that defense budget is capital expenditure. The US spends a much larger fraction of its defense budget (about 65-70%) on capital expenditure - meaning more modernisation. In India that figure is 23-25% (including pensions, of course).

If this were an Indian defense forum I'd ask the Mods to delete your posts to prevent others from being misled.

 

[Bheemsen]

We do not need to pay the entire sum in the first year. The advance payments is only 15% of the total amount.

But there are many things for which orders and contracts need to be executed this year in parallel so this amount dosent fit the bill

 

[Sloth 22]

total defence Budget is 54 billion$ including 90,000 cr for pension

The 90thousand crore is disburse through the Ministry of defence for now civilians ex-service men , nowhere in the world is this counted in defence budget.

Spending on the present inservice men is the part of defence budget.

You simply have no idea of how the defense budget works - and then post erroneous conclusions.

Earlier you had no idea what defense pensions were and tried to cast aspersion on a perfectly good article simply because you did not understand that defense pensions are accounted under a distinct head. Here's that exchange - for benefit of others who read this thread

https://defence.pk/threads/defence-...rcent-hke-to-56-bn.475207/page-3#post-9160938

Now on this thread, you continue to post nonsense about capital expenditure.

So here's a short take for those who have an interest in these things:

The defense budget excluding defense pensions (about 0.90 lakh crores - a significant amount) as well as amounts spent on NCC, BRO, Coast Guard, etc. is Rs. 2.74 lakh crore. As a matter of fact these extra items were customarily included in the defense budget till 2016-17 when Jaitley first made that change. There are many theories why - my guess is he wanted the defense budget to show a higher capex : revenue exp. ratio.

Now this Rs. 2.74 lakh crore has allocation for capital expenditure and revenue expenditure.

Capital expenditure outlay is Rs. 0.86 lakh crore, rest Rs 1.88 lakh crore is Revenue expenditure (salaries, routine maintenance, commonly used items, etc.).

Between 80 to 90% of this capex allocation (depending on estimates) is towards pre-committed (or contracted) capital expenditure - i.e. liabilities to be paid in this fiscal year on account of contracted acquisition - i.e. Rafaeles, submarines, tanks, transport aircraft, etc. In other words the Rafaele instalment to be paid this year will very much come out of the capex outlay of Rs 0.86 lakh crores.

The remaining 10-20% is basically a contingency head in case sudden or urgent acquisition is needed (such as the occurrence of a Kargil-like event). In most years the contingency (or non-plan) portion is not utilised prompting commentators to say that the government has not utilised its defense allocation entirely - which is also misleading.



Defense to GDP spending is meaningless if we do not know what percentage of that defense budget is capital expenditure. The US spends a much larger fraction of its defense budget (about 65-70%) on capital expenditure - meaning more modernisation. In India that figure is 23-25% (including pensions, of course).

If this were an Indian defense forum I'd ask the Mods to delete your posts to prevent others from being misled.

Same are my views on you. Don't troll and try to mislead.

You are on my ignore list!

 

[schoolboy]

The 90thousand crore is disburse through the Ministry of defence for now civilians ex-service men , nowhere in the world is this counted in defence budget.

Except..it was part of India's defense budget till 2016-17. Does history start from 2016 for you?

This payment has its separate allocation and the capital budget or 12.7 Billion USD for this year won't be used for it.

If you have some way to substantiate your claim that the payment for the Rafaeles is separately allocated above and beyond this capital outlay, please tell us what that "separate allocation" is.

 

[Indika]

The 12.7 Billion USD amount known as capital budget is for newer purchases , it is not spent on payment of deals which already are signed.Their allocation is separate.

For example , we have paid 15% of Rafale deal amount last year's as first advance payment and will pay 25% of deal this year as 2nd advance payment. This payment has its separate allocation and the capital budget or 12.7 Billion USD for this year won't be used for it.

https://twitter.com/x/status/826683952677191681

Send the budget figures to trump & putin. Even a 30% cut out of it will make a sizable chunk.

total defence Budget is 54 billion$ including 90,000 cr for pension

Nearly 14.00 billion thats quite a sum and it will grow year over year. No wonder they are finding it tough to implement OROP.

 

[Abingdonboy]

Apache, S-400 etc covered under this is 12 billion or is this for new signings only ?

Apaches have already been paid for and ordered, S-400 may be ordered in the next FY.

If 100% of the capital budget is used , and on average 15% is the first advance payment , we can sign deals upto 75 billion USD in worth.

Spot on! However the 15% rule only applies for the largest deals, in some cases, for smaller value deals, it will be 50-100% upfront.