New Delhi: Out of every rupee that the government spends, nearly 16 paise go towards the defence establishment of the country. As India prepares to beef up its security, Defence expenditure in the Union Budget is set to rise to a record Rs 90,000 crore.
The 1.2-million-strong Army will continue to get a lion's share of the revenue outlay.
But about 40 per cent of the Defence Budget will have to be set aside for making heavy payments for deals already signed.
The Defence Ministry is committed to making payments of thousands of crores in the next financial year each for an aircraft carrier and its complement of aircraft from Russia, submarines from France and advance jet trainers from Britain.
These include the Scorpene submarines, the Gorshkov aircraft carrier and the Hawk trainers.
On the capital expenditure side, the armed forces have made a strong case for increasing the outlay from the current Rs 34,375 crore.
This is to meet the commitments for orders placed by the present and previous governments and sign contracts for more equipment, primarily for the Army and the Navy.
More requirements like the Light Combat Aircraft, submarine rescue vessels and artillery will jostle for a share of the capital outlay.
Despite the mega bucks, Indian defence-spend will still be less than 2.5 per cent of the GDP, way below that of neighbours China and Pakistan.
While India continues with high-end military purchases, industry is hoping to benefit from the trade.
The Government has announced that foreign companies supplying equipment worth over Rs 300 crore would have to source one-third of the value of the contract from the host country.