It is important to restore the functional self-sufficiency of the finance division of a ministry which handles 17-18 per cent of the total central government expenditure so that it could discharge its responsibilities without real or perceived pressures.
The basic challenge for defence economists is to demonstrate that there are other feasible ways of skinning the cat during budget formulation. But the challenge is also inextricably linked with the need for rationalisation of defence expenditure.
The objective of asking these question should be to elicit information that generates a well-informed debate on, and facilitates the result-oriented monitoring of, the MoD’s handling of matters related to the defence budget.
While certain changes in the format of the defence Demand for Grants have brought even more complexity to the task of estimating India’s official defence budget, the fact remains that there has only been a meagre increase of 5 per cent which is grossly inadequate to keep the Armed Forces in fighting form.
Budget is not just all about figures but also a statement of policy. The Defence Budget for 2017-18 contains no hint of any intention of the government to bring about a paradigm shift in the defence policy.
If the defence expenditure relationship to the GDP of 1.65 per cent is maintained, we may see a budget estimate (BE) for defence expenditure of Rs. 285,000 crores, against the current year BE of Rs. 249,099 crores.