In a marginal hike, the defence budget was increased to Rs 3.37 lakh crore for 2020-21 against last year's Rs 3.18 lakh crore, belying expectations of a significantly enhanced allocation to fast-track long-pending military modernisation.
Out of total allocation, Rs 1.13 lakh crore has been set aside for capital outlay to purchase new weapons, aircraft, warships and other military hardware, according to the Union Budget presented in Lok Sabha on Saturday by finance minister Nirmala Sitharaman.
The revenue expenditure which includes expenses on payment of salaries and maintenance of establishments has been pegged at Rs 2.09 lakh crore.
The total outlay does not include Rs 1.33 lakh crore set aside separately for payment of pensions.
The percentage of the allocation has almost remained static at around 1.5 per cent of the GDP which, according to experts, is the lowest since the 1962 war with China.
