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Customs duty exemption to help defence forces save Rs 25,000 crore annually: Defence Ministry

File photo of Indian army.  Photograph:( Reuters )

ANI New Delhi, Delhi, India Jul 05, 2019, 08.45 PM (IST)

Finance Minister Nirmala Sitharaman enhanced the defence budget marginally but exempted defence imports from custom duties which will help the services save around Rs 25,000 crore annually.

"In a significant development, import of Defence Equipment not manufactured in India has been exempted from Basic Customs Duty. This will have an impact of augmenting the Defence Budget by approximately Rs 25,000 crore on account of savings in expenditure on Customs Duty over the next five years," the Defence Ministry said.

Rs 3,18,931.22 crore has been earmarked for Defence excluding Defence Pensions. For Defence Pension, an amount of Rs 1,12,079.57 crore has been provided in Budget Estimate 2019-20.

Taking into account both the budget and pensions, the allocation for defence comes to Rs 4,31,010.79 crore.

The allocation for Defence accounts for 15.47 per cent of the total Central Government expenditure for the Financial Year 2019-20.

"The allocation of Rs 3,18,931.22 crore represents a growth of 7.93 per cent over Budget Estimates (2,95,511.41 crore) and 6.87 per cent over Revised Estimates (Rs 2,98,418.72 crore), respectively for the Financial Year 2018-19," the ministry said.

Out of Rs 3,18,931.22 crore allocated for the Financial Year 2019-20, Rs 2,10,682.42 crore is for Revenue (expenditure meaning for paying salaries and maintaining g existing inventory while Rs 1,08,248.80 crore have been given for Capital expenditure for the Defence Services and the Organisations/Departments under Ministry of Defence.

The amount of Rs 1,08,248.80 crore allocated for Capital expenditure, includes modernisation related expenditure.

The Capital Allocation of Ministry of Defence under BE 2019-20 is 31.97 per cent of the total Central Government Capital Expenditure, which is Rs 3,38,569 crore.