Defence budget 2016 This is the first time in public memory that outlay for defence was not covered by the Finance Minister in his speech to the Lok Sabha. 2. The Defence Budget used to be covered under eight demands till FY 2015-16 (Demand Numbers 21 to 28) but is now under only four demands (Numbers 20 to 23).

2.  India plans to focus defence spending more on the domestic market
instead of importing combat planes, ships and submarines, after
saying on Monday it will leave military spending for 2016/17 largely
unchanged following years of increases.
 Major global defence companies have been circling over the Indian
market, buoyed by the military's modernisation plans worth more
than USD 100 billion.
 In this federal budget presented to parliament on Monday Finance
Minister Arun Jaitley allocated 2.49 trillion Indian rupees (USD 36.5
billion) for defence, a 0.96 percent increase over the 2015/16
allocation of 2.46 trillion rupees.

3.  Amit Cowshish, who handled defence accounting in the ministry, said more
than funds, the bigger problem was lack of clarity on the defence procurement
policy. "It's not that the money is not there, it's that there's no still no clear-
cut policy on indigenous manufacture, the procedures etc. That is why even
the money that has been allocated ends up not being spent."
 The budget papers showed that the military didn't spend the full amount
given to it last year. The revised estimate for spending for the fiscal year
ending in March was 2.24 trillion rupees.

4.  Defence wages and pensions have also risen this year, making even
less money available for modernisation, Cowshish said.
 China is expected to announce a large rise in defence spending next
month, as the ruling Communist Party seeks to assuage the
military's unhappiness at sweeping reforms and as worries over the
South China Sea and Taiwan weigh on Beijing. At 886.9 billion yuan
(USD 136.4 billion), China's budgeted defence spending last year
was more than three times that of India's expenditure announced on
Monday.

5. 1. This is the first time in public memory that
outlay for defence was not covered by the Finance
Minister in his speech to the Lok Sabha.
2. The Defence Budget used to be covered under
eight demands till FY 2015-16 (Demand Numbers
21 to 28) but is now under only four demands
(Numbers 20 to 23).

6. 3. Since the mid-1980s, defence pensions were not
included in the defence budget. But defence pensions have
now been included in the defence budget.
4. Excluding the defence pensions, an amount of Rs
258,589 crore has been allocated for defence. This
compares with Rs 2,46,727 crore allocated in the last
budget, out of which Rs 233,341 crore was spent by the
defence ministry.

7. 5. A total of Rs 82,332 crore has been budgeted for defence
pensions this time, mainly to cater for the announcement
of One Rank One Pension (OROP) and the Seventh Pay
Commission. In comparison, Rs 54,500 crore were
allocated for pensions in the last budget but the actual bill
shot up to Rs 60,238 crore.
6. Rs 95,852 crore will be spent on pay and allowances of
military personnel and civilians of the defence ministry in
the coming year.

8. 7. Out of Rs 85,894 crore allocated last year for capital
expenditure by defence services, the defence ministry was
unable to use 13.5% of the amount. An amount of Rs
78,586 crore has been allocated for capital expenditure of
the defence services this year.
8. In a first, the defence services even returned money
from their revenue allocation. Rs 6,732 crore were
returned out of a revenue allocation of Rs 132,540 crore
last year.

9. 9. The capital allocation in this budget and the perennial
underspending means that defence modernization will
continue to suffer in the coming year.
10. The defence budget comes to 1.71 % of the GDP, and
taken with defence pensions, 2.26 % of India’s GDP. The
parliamentary standing committee has recommended a
minimum of 3% of GDP as the defence budget in its
reports to the parliament.