NEW DELHI: The union government on Saturday allocated Rs 3.37 lakh crore as the defence budget for 2020-21, which is a hike of only 5.8 percent over the allocation for this sector for the current financial year. The disappointing part is that there has been a very marginal increase in the capital outlay for defence for 2020-21 as compared to the budget estimates and revised estimates for 2019-20, which will affect several big ticket projects of the defence forces that are being done for building capabilities against China and Pakistan.There was also no mention of the defence budget during the budget speech of Finance Minister Nirmala Sitharaman who was earlier the Defence Minister, indicating that the government has prioritised other sectors over defence. Without the pension, the defence budget is only 1.5 percent of the GDP.As part of the Rs 3.37 lakh crore (excluding pension) allocated for defence for 2020-21, Rs 1.18 lakh crore is the capital outlay and Rs 2.18 lakh crore is the revenue head. Separately Rs 1.33 lakh crore is the allocation for pensions. The capital outlay for the budget estimate for 2019-20 was Rs 1.08 lakh crore. So, there has only been an increase of Rs 10,306.2 crore in the capital head for 2020-21 as compared to what it was for the current financial year. Similarly, there has only been an increase of Rs 3,183.64 crore in the capital head as compared to what it was in the revised estimate for 2019-20. The capital outlay for the revised estimate was Rs 1.15 lakh crore.The bare minimum increase in capital outlay will drastically affect several major acquisitions of the army, navy and air force. The army is already procuring high-end artillery systems such as the M777 ultra light howitzers, the K-9 Vajra self-propelled gun and the indigenously developed Dhanush for the frontiers with China and Pakistan. Payments for these are ongoing. The IAF too is also paying for modern weapon systems such as the Rafale fighters and S-400 air defence system.The meagre allocation will also affect the navy, which had earlier approached the government for additional funds amid a severe financial crunch that is forcing it to rationalise and reduce its requirements. Due to the low budget, the navy has had to rework its plan of having 200 warships by 2027. The navy has been pushing to get its share of the defence budget back to the 18 percent it was 2012-13 from 13 percent for the current financial year. The navy has also had to cut down on the numbers planned to be acquired in some projects such as Mine Counter Measure Vessels and P8i maritime reconnaissance aircraft.In view of the committed liabilities from past years the allocated budget will fall short of the armed forces’ requirements. The budget is also unlikely to cater to inflation and GST rates.The defence budget this time is only a 5.8 percent hike as compared to defence budget estimate of 2019-20, while it is only a 1.9 percent increase over the revised estimate. The hike is much less as compared to the percentage increase in the defence budget for 2019-20, which stood at 7.93 percent.The revenue head continues to remain larger than the capital outlay. This is mainly because of the large number of pays and allowances, including increments that have to be paid for the personnel of the defence forces. The revenue head also takes care of repairs and transport, which are crucial for running a force. For example in the army, the revenue to capital ratio is 82:18. However, this head too has witnessed only a marginal increase over what it was in budget and revenue estimates of 2019-20. Meanwhile, separately Rs 1.33 lakh crore is the allocation for pensions.But, it remains to be seen whether the appointment of the Chief of Defence Staff, aimed at improving jointness between the forces, can synergise their requirements and prioritise them according to the budget.Defence Minister Rajnath Singh, commenting on the budget, said, “The first Budget of the new decade presented today by Finance Minister Smt. Nirmala Sitharaman gives an outline of a New and Confident India. It is a promising, proactive and progressive Budget which will make India healthy and wealthy in coming years.”