Defence Budget 2016-17

Overview • Introduction

• History of defence sector

• Expectations from 2016-17

• Highlights of Defence sector 2016-17

• Comparison between 2015-16 and 2016-17

• Where do we stand?

Introduction• Defence budget is the portion of the

overall budget of Union budget, allocated for the funding of the Indian Armed Forces

• Defence budget is crucial for the country and any amount can be issued to defence sector at any point of time

• Defence was not covered by finance minister in his speech of Lok Sabha in 2016-17 budget, for the first time

History of Defence Sector

Expectations from 2016-17

• 10% increase from 2015-16 allocation

• Operational expenses on account of Pay Commission to deplete

• Make in India in DPP to increase by 200%

• The share of IAF in capital acquisition should see a substantial increase

• 'Defence Technology Fund' to be enhanced to Rs 1,000 cr, ceding to the long-standing demand of the industry

Highlights of Defence sector 2016-17• An outlay of Rs 2,49,099 cr has been

proposed as budget estimates (BE) for the financial year 2016-17

• There’s a hike of 11%

• Allocation does not include defence pension and some civil expenses

• Capital allocation for defence ministry is 86,340 cr of which 78,587 cr is for services procuring weapons

Highlights of Defence sector 2016-17

• Due to non-completion of contracts the sector has returned 13,188 cr

• Huge jump of 82,332 cr due to implementation of one rank, one pension

• Revenue component of defence (services) estimated at 1,62,759 cr in budget estimate 2016-17

Comparison between 2015-16 and 2016-17

• India's defence budget was likely to see a hike of 9% to Rs 2.68 lakh cr in 2016-17 while the pension bill alone may go up by over Rs 80,000 cr

• Further, defence ministry to surrender 12,400 cr , or 16% of the Rs 77,406 cr for acquisitions under the capital head

• Budget allocation of 2016-17 is 11% higher from last years

Comparison between 2015-16 and 2016-17

Where do we stand?

REGION OFFICAL BUDGET

USA $575 billion

CHINA $131 billion

INDIA $40 billionUSA CHINA INDIA

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Questions?

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