India spent ₹20,776 cr on border security after China row

India spent ₹20,776 crore on the emergency purchase of weapons and systems to beef up its military capabilities to deal with new security challenges in the midst of a lingering border dispute with China in eastern Ladakh, where both armies have deployed about 100,000 soldiers and advanced weaponry, budget documents showed on Monday.

The money spent on building capabilities was over and above the budget allocation for modernisation last year. India earmarked ₹1.13 lakh crore as military capital expenditure in budget 2020-21 but revised estimates (RE) presented in Parliament by finance minister Nirmala Sitharaman show the military ended up spending ₹1.34 lakh crore on modernisation.

The border conflict forced India to speed up the purchase of smart air-to-ground weapons, missiles, rockets, air defence systems, Gps-guided artillery ammunition, tank ammunition, and assault rifles.

The increase in capital expenditure for the defence-- up to ₹1.35 lakh crore in budget estimates 2021-22 -- up almost 19% at a time when India is planning to place orders for fighter jets, medium transport aircraft, basic trainer aircraft, light combat helicopters, surface-to-air missiles and loitering weapons systems -was one of the highlights of the data on defence sector.

The allocation under the capital head has been significantly increased, the defence ministry said. “The allocation represents an increase of 18.75% over FY 2020-21 and 30.62% over FY 2019-20. This is the highest ever increase in capital outlay in the past 15 years,” the ministry said.

Overall, India has set aside ₹4.78 lakh crore for military spending in fiscal 2021-22, compared to last year’s ₹4.71 lakh crore --- both figures include defence pensions. This translates into an increase of 1.45%.

If defence pensions are not taken into account, this year’s military spending is ₹3.62 lakh crore, compared to ₹3.37 lakh crore last year -- an increase of 7.3%. Budget documents show that the government’s defence pension bill will be lower than last year – down from ₹1.33 lakh crore to ₹1.15 lakh crore.

Sitharaman said the government agreed in principle to provide a non-lapsable fund for defence for the first time. This will help military modernisation as unspent funds will not have to be returned at the fiscal-end.