Defence Sector Sees Modest Hike of 6%
New Delhi: A modest 6% hike in allocation shows that defence spending remains a low priority area for the government. The hike is unlikely to meet the impactofinflation,depreciation of the rupee and the imposition of customs duty on military imports from last year.
Peggedat1.62%oftheGDPthis year, the allocation is unlikely to cater for major weapons purchases. This is despite the recommendation of a key defence ministrypanelthatthespending should be 2.5% of the GDP.
“The fact that all defence imports now attract customs duty and the rupee has depreciated against the dollar, it will be interesting to see how the large pending procurements go ahead,” said Ankur Gupta, vice-president, aerospace & defence at EY India. (BE) (RE) (BE) (RE) (BE) (BE) (RE) (BE) (ET) (BE) (BE) (BE) (BE) ET: Earlier Target