Defense Budget: Insufficient Allocation for Modernization of Forces

Abstract

The Indian defense sector is growing at an unprecedented rate in comparison with other leading countries. India is ranked as the 5th largest investor in defense globally. India established itself as the World’s largest arms importer, with 70 percent of its defense procurement coming from foreign companies. The threat from China and Pakistan and their growing defense capabilities have led to a modernization drive; the present government has increased its allocation for capital expenditure to buy fi ghter jets and expand the naval force. In general, several pressing security issues largely determine the direction of India’s security policy and its military spending. First, the insurgency in Kashmir and the related confl ict with Pakistan remain unsolved. Indian armed forces are steadily undergoing modernization, such as futuristic soldier systems and missile defense systems. However, the allocation of resources has been severely inadequate in the recent past that fails to address the various needs of the armed forces in India. This paper will focus on the distribution of funds between capital and revenue expenditure and its significance.