The Central Government can handle an increase in defence spending without breaching the 4.4% fiscal deficit target.
The Defence Ministry may request ₹50,000 crore more in the December Supplementary Budget.
Economists say this extra spending is manageable due to higher revenues and possible cuts in other expenditures.
Lower global oil prices and steady tax income provide fiscal flexibility.
Defence spending cuts, if needed, would come from various small reductions in revenue spending.
A large dividend from the RBI (₹2.1 lakh crore last year) adds financial cushion.
Historically, India’s fiscal deficit has stayed controlled during most military tensions unless global crises or wars occurred.
Past spikes in fiscal deficit were more due to wars or global events than defence spending alone.
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