Allocation for defence budget has for the first time crossed the Rs three lakh crore mark with the government setting aside Rs 3,18,931 crore for the sector in the interim budget 2019-20, which is a hike of over Rs 20,000 crore allotted last year.
The allocation for defence pensions has also been hiked to Rs 1,12,079 crore and the total expense on the defence forces and pensions accounts to 15.48 per cent of the total government spending.
Presenting the interim budget in Parliament, Union Minister Piyush Goyal said: "Our Defence Budget will be crossing Rs 3,00,000 crore for the first time in 2019-20."
The minister said, "for securing our borders and to maintain preparedness of the highest order, if necessary, additional funds would be provided".
The government has increased the allocation for buying new weapon systems and modernisation from Rs 10,000 crore to Rs 1,08,248 crore.
"The revenue expenditure would be taken care of by an allocation of Rs 2,10,682 crore," the minister said.
The total expenditure of the central government for new schemes is Rs 3,36,293 crore out of which the defence forces have received 32.19 per cent.
Goyal stated that for taking care of the honour of the defence forces soldiers, the government has already dispersed Rs 35,000 crore for the implementation of the One Rank One Pension (OROP) scheme which had been pending for the last 40 years.
"The previous governments announced it in three budgets but sanctioned a mere Rs 500 crore in 2014-15 Interim Budget; in contrast, we have already disbursed over, Rs 35,000 crore after implementing the Scheme in its' true spirit," Goyal said in his speech.
The government also announced a substantial hike in the Military Service Pay (MSP) of all service personnel and special allowances given to Naval and Air Force personnel deployed in high-risk duties.
The 7 per cent hike in the budget has come at a time when the armed forces if faced with huge load of committed liabilities, meaning the amount due to be paid for deals which has already been finalised, such as the Rafale combat aircraft contract and the Rs 40,000 crore acquisition of the S-400 air defence missile systems from Russia.
Under the strategic partnership policy, the government is also about to initiate different defence deals including 114 multirole fighters, six conventional submarines under the Project-75 India and over 300 helicopters of different types for the three services.