INDIA’S DEFENCE BUDGET (2010-2011): WAKE UP CALL FOR DEFENCE MANAGERS
Arvin Kadyan
IDSA Comment, March 3, 2010
As per the Budget Estimates (BE) proposed for the year 2010-11, the total expenditure of Central government will be Rs. 11,08,749 crore, which is an increase of 8.6 per cent over total expenditure in BE of 2009-10. The Plan and Non Plan expenditure in BE 2010-11 are estimated at Rs. 3,73,092 crore and Rs. 7, 35,651 crore, respectively. While there is a 15 per cent increase in Plan expenditure, the increase in Non Plan expenditure is only 6 per cent over BE of 2009-10. The fiscal deficit has been projected as 5.5 percent of GDP in 2010-11 against 6.9 per cent during the preceding year.
The fiscal year 2009-10 was a challenging year for the Indian economy. The significant deceleration in the second half of 2008-09 brought the real GDP growth down to 6.7 per cent, from an average of over 9 per cent in the preceding three years. However, due to implementation of broad based counter cyclic policy package, the negative fallout of the global slowdown has been arrested. Although due to fiscal expansion and liberal monetary policy, the Indian economy is showing some signs of stabilization, unless there is consolidation of gains achieved during the last fiscal year the economy may take longer to revert to the high GDP growth path.
The Thirteenth Finance Commission has recommended a calibrated exit strategy from the expansionary fiscal stance of the last two years. As a part of the fiscal consolidation process, the Finance Minister in his Budget speech on February 26, 2010 proposed to reduce the domestic public debt-GDP Ratio. In the Medium Term Fiscal Policy Statement, the Government has proposed a rolling target for fiscal deficit in the next two fiscal years. It is proposed to bring down the fiscal deficit from 5.5 per cent of GDP in 2010-11 to 4.8 per cent in 2011-12 and to 4.1 per cent in 2012-13.
Arvin Kadyan
IDSA Comment, March 3, 2010
As per the Budget Estimates (BE) proposed for the year 2010-11, the total expenditure of Central government will be Rs. 11,08,749 crore, which is an increase of 8.6 per cent over total expenditure in BE of 2009-10. The Plan and Non Plan expenditure in BE 2010-11 are estimated at Rs. 3,73,092 crore and Rs. 7, 35,651 crore, respectively. While there is a 15 per cent increase in Plan expenditure, the increase in Non Plan expenditure is only 6 per cent over BE of 2009-10. The fiscal deficit has been projected as 5.5 percent of GDP in 2010-11 against 6.9 per cent during the preceding year.
The fiscal year 2009-10 was a challenging year for the Indian economy. The significant deceleration in the second half of 2008-09 brought the real GDP growth down to 6.7 per cent, from an average of over 9 per cent in the preceding three years. However, due to implementation of broad based counter cyclic policy package, the negative fallout of the global slowdown has been arrested. Although due to fiscal expansion and liberal monetary policy, the Indian economy is showing some signs of stabilization, unless there is consolidation of gains achieved during the last fiscal year the economy may take longer to revert to the high GDP growth path.
The Thirteenth Finance Commission has recommended a calibrated exit strategy from the expansionary fiscal stance of the last two years. As a part of the fiscal consolidation process, the Finance Minister in his Budget speech on February 26, 2010 proposed to reduce the domestic public debt-GDP Ratio. In the Medium Term Fiscal Policy Statement, the Government has proposed a rolling target for fiscal deficit in the next two fiscal years. It is proposed to bring down the fiscal deficit from 5.5 per cent of GDP in 2010-11 to 4.8 per cent in 2011-12 and to 4.1 per cent in 2012-13.
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