Question

How much indian percentage of our gdp we invest on weapons?

Answer 1

Answer:

Finance Minister Nirmala Sitharaman has allocated Rs 4.31 trillion for defence spending (including military pensions of Rs 1.12 trillion), the same as in the February 1 interim Budget. As a proportion of gross domestic product (GDP), however, the allocation is inching steadily lower, towards the 2 per cent mark.

In 2014-15, defence allocations, including pensions, accounted for 17.1 per cent of the central government’s spending, or about 2.28 per cent of GDP. This year, the Defence Budget will comprise 15.5 per cent of government expenditure and only 2.04 per cent of GDP.

In countries like India that face significant security threats, the norm is for defence spending to rise at least in tandem with GDP. Were allocations to have remained at the 2014-15 level of 2.28 per cent of GDP, the military would be getting Rs 50,640 crore more this year than it has received.

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Defence spending is falling in percentage terms even though all military purchases are now subject to the goods and services tax (GST). For many items, such as vehicles, this is levied at the higher rates of 18 per cent and 28 per cent. Nor do defence allocations cater for the addition of 100,000 more soldiers added to the army over the preceding decade, which the government sanctioned to cater for the rising threat from China.

Over the last dozen years, the salary bill has risen six-fold, with swelling manpower numbers compounded by the salary and pension hikes of the Sixth and Seventh Central Pay Commissions and the One Rank One Pension award of 2014-25. Providing some relief to the military, the finance minister announced Customs duty exemption for the import of defence goods.