The Indian Ministry of Defense on Thursday got a 14 per cent budget hike (about $37.45 billion approximately) for 2013-14 with a promise from Finance Minister P Chidambaram to provide any additional fund required for national security. Thursday's allocation is up by $46.76 billion from 2012's revisited estimate of $33.16 billion.
"I propose to increase the allocation for defence to Rs 2,03,672 crore. This will include Rs 86,741 crore ($16 billion) for capital expenditure," Chidambaram said. "The Defence Minister has been most understanding and I assure him and the House that constraints will not come in way of providing any additional requirement for the security of the nation.”
The defense ministry in 2012-13 received a 17 per cent increase in budget and an additional 12 percent later to fund the modernization program that awarded India title of world’s largest arms exporter.
The Indian Armed Forces are currently undergoing a major modernisation process with several acquisitions in the pipeline including acquisitions of 126 multirole combat aircraft, 22 Apache attack choppers and 15 heavy-lift choppers.
Meanwhile, India is also negotiating a series of contracts, including the 126 French Rafale fighter jets, 400 combat helicopters, as well as artillery, drones and electronic warfare systems.
“I assure the house that constraints will not come in the way of providing any additional requirement for the security of the nation,” Chidambaram told parliament.
The hike could be a result of growing tensions with neighbors China and Pakistan’s, both of whom have recently inducted aircraft carriers and tested ballistic missiles respectively.
New Delhi is currently upgrading its infrastructure in the northeast along with its border with China. India is also locally constructing a nuclear-powered submarine and a range of nuclear-tipped ballistic missiles which can strike deep inside China.