India on Friday increased its total budgetary outlay on its defence by around 17 per cent to USD 42 billion for 2012-13, from last year's USD 36 billion.
Announcing the Budget for 2012-13 in Indian Parliament, Finance Minister Pranab Mukherjee said that this allocation was based on the present needs projected by the defence ministry, and that it would further meet the needs for national security.
He further elaborated that USD 17.5 billion would be used in acquiring defence equipment (new procurement of weapons and systems) in order to further strengthen the country's military capability. This is around 15.7 percent higher than last year's capital allocation of USD 15 billion. The Finance Minister also announced that the country's total expenditure for 2012-13 is budgeted at around USD 350 billion, out which USD 120 billion is planned (18 percent more than last year's), while the rest is non-planned expenditure.
Mukherjee said that the combined effect of lower tax and disinvestment receipts and higher expenditure, mainly on account of subsidies, had pushed the fiscal deficit to 5.9 per cent of GDP in the Revised Estimates for 2011-12. According to him, the total Debt stock at the end of 2012-13 would work out at 45.5 per cent of GDP (gross domestic product), as compared to the target of 50.5 per cent of GDP. The Effective Revenue Deficit in 2012-13 would be 1.8 per cent of the GDP, added the Minister.