The defence budget for the financial year 2009-2010, even though in terms of percentage increase appears large, yet it is not actually so. There has generally been a mismatch between the funds asked by the MOD and those allotted by the MOF. The absence of indication of likely availability of funds impacts adversely the defence planning process. Of late, there has been improvement in the ratio of revenue to capital expenditure, but for a healthy ratio there is a need to increase the defence budget as a percentage of the GDP.
Need for a Resource Generation and Management Cell in Defence
The orientation of the existing administrative set up in Service Headquarters and in departments under the Ministry of Defence is to plan for the utilization of defence budget allocation. They are not in a position to pay attention to the aspect of defence receipts.