The Indian Finance Minister Arun Jaitley announced an increase of more than 10% in India’s defense budget for the coming fiscal year.
The previous Indian defense budget was 2.49 trillion rupees last year, which has been increased to 2.74 trillion rupees.
Defense Budget Major Chunk of Government Expenditures
The defense budget of India is at 12.78 percent of government’s total expenditure, estimated be around 21.47 trillion rupees.
Last year also, India increased its defense budget by 10 percent. Analysts of Indian defense budget have given the justification of this increase to be inflation and the supposed upgradation of the Indian military hardware.
This increase in military budget does not include the factoring of army’s pension.
Indian Economy Bounced Back after Demonetization – Jaitley
The Indian Finance Minister also said that Indian Economy was a global growth engine but there were risks related to US interest rate hikes, rise in oil prices, and globalization.
Indian PM last month announced scrapping of high value Indian rupee notes worth 86 percent of the total Indian cash in circulation.
According to the Minister, worst of the cash crises is over now and the impacts of India’s demonetization would not spill into the new year.
The Indian Minister is forecasting the growth to remain at least 6.5 percent or more up till March 2017. He was hopeful that the pace of the growth would pick up after that, expected to be between 6.75 and 7.5 percent.
Modi’s Government Preparing for Elections and Economic Performance
The current government also wants to make sure that it wins the next elections. On the social front, there are a lot of differences with the government of PM Modi. Minorities, particularly Muslims do not feel safe from his government’s actions.
In Punjab, Modi tried to lure in the crowds by promising big on Indus Water Treaty’s annulment and bringing back water to the Indian Farmers.
The Modi government, in order to have a better chance of winning the next elections need to show performance. Economy experts believe that Modi’s government must maintain a minimum growth rate of 8 percent to deliver the kind of performance which can actually create jobs. This also means adding more casts to the quota system. The OBC quota for Jats is one example of the job quotes for different casts in India.