On 28th February, the finance minister took 100 minutes and 12,808 words to present his Budget proposals before Parliament.

The defence budget was dealt with in just 36 words: "I propose to increase the allocation for defence to Rs 96,000 crore (Rs 960 billion). This will include Rs 41,922 crore (Rs 419.22 billion) for capital expenditure. Any additional requirement for the security of the nation will be provided."

Chidambaram's brevity blurs some important issues. The first piece of obfuscation centres around the total amount being spent by the government on defence.

The figure of Rs 96,000 crore includes only the revenue expenditures on the Army (Rs 34,086 crore), Navy (Rs 6968 crore), Air Force (Rs 10,193 crore), ordnance factories (a profit of Rs 356 crore), the Defence R&D Organisation (Rs 3186 crore), and capital expenditure for modernising the military (Rs 41,922 crore).

These comprise demands number 22 to 27 in the demands for grants. Inexplicably omitted from the calculation are the expenditures on the Ministry of Defence (MoD) and defence pensions, which form demands number 20 and 21.

As a result, the figure of Rs 96,000 crore underestimates actual spending on defence. If Rs 2,046 crore (Rs 20.46 billion) allocated for the MoD and Rs 14,649 crore (Rs 146.49 billion) for defence pensions are taken into account, India will actually spend Rs 1,12,695 crore (Rs 1,126.95 billion) on defence in 2007-08. That amounts to over 16 per cent of government spending, not 14 per cent, as portrayed.

The logic for keeping the MoD and pension allocations out of the defence budget is incomprehensible. The MoD budget is not spent entirely, or even mainly, on civilian employees and the ministry secretariat.

Crores of rupees are allocated to regular combat units like the Jammu and Kashmir Light Infantry, which the Budget notes categorise as "a full-fledged regiment of the Indian Army having 15 battalions apart from a regimental centre."

Similarly, defence pensions are directly related to military manpower expenses; excluding pensions from the defence budget is as justifiable as excluding soldiers' salaries.

Fudging the defence budget is now institutionalised, a trend that began with Indira Gandhi in 1970, and picked up pace in the late 1980s.