Defence budget rises to 2.74 lakh crore

Union Finance Minister Arun Jaitley during his Budget speech mentioned that the budget allocation for defence has been increased by 5.8 per cent to Rs 2.74 lakh crore for FY 2017-18 in comparison with Rs 2.49 lakhs allocated in the previous year.

This budget however, does not include pension outlay. Out of Rs 2.74 lakh crore, Rs 86000 crore is allocated for capital acquisition. Finance Minister has also talked about introducing two web based dedicated platform, one for booking tickets online for the soldiers and the other for online pension distribution system.

As per the trend, in the previous two Union Budgets, the government had increased its budget allocation by 11 per cent and 10.5 per cent in 2016 and 2015 respectively.

Reacting to the budget, defence supporting companies are trading flat to positive as the bourses have expected to grow this budget allocation by at least 10 per cent.

Currently, India holds fourth position when it comes to allocating budget for defence. This may go up in the following years on the back of increased geo-political tension of the country.

Stocks like BEML, Bharat forge and BEL has gained 2 per cent, 1.42 per cent and 1.34 per cent respectively, reacting to the Budget news on Wednesday.