Moneycontrol News
After the Union Budget 2018, many criticized Finance Minister Arun Jaitley for allocating inadequate funds to the defence ministry.
At 1.56 percent of the GDP, this was the lowest allotment to defence in India since 1952. But this trend of falling defence budgets is being seen in countries across the globe today, a Times of India report said.
In 2018, the government allocated Rs 2.74 lakh crore for defence, the lowest in terms of share of GDP since 1952. When other countries were analysed for their defence spending as a percentage of GDP, similar results were found.
The pattern is that as the economy grows, proportion of defence expenditure falls as compared to the economy’s overall size. USA spent 8.6 percent of its GDP on defence in 1960, which gradually dropped to 5.3 percent in 1990. In 2016, USA spent 3.3 percent of its GDP on defence.
The United Kingdom’s spending on defence too dropped gradually over the years from 6.3 percent in 1960, to 1.9 percent in 2016. Germany spent 1.2 percent in 2016 as compared to 4 percent in 1960.
Major economies like China, France, Japan, Italy and Brazil have recorded similar, drastic falls in their defence spending over the same period.
Russia is an exception in this case, since its defence spending rose from 3.6 percent in 2000 to 5.3 percent in 2016.
Most of these countries are not self-sufficient for their military needs; they are dependent on others for import of military equipment. India recently became the top importer of arms in the world.
The biggest suppliers of arms in the world are USA and Russia. USA spends the most on its defence, roughly equal to the defence budgets of the next nine highest-spending countries.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
