I. The Big Story: Sino-Indian Relations
India’s Finance Minister Nirmala Sitaraman presented the Union Budget in the Indian Parliament this week. Against the backdrop of the stand-off with China and an impetus for military modernisation, capital expenditure in the defence budget saw an increase of ₹21,326 crores, or 18.75 per cent, from the Budget estimates of 2020-21. Moreover, an additional Rs 20, 776 cr was spent last year amid the stand-off for emergency purchases. The overall defence budget this year was hiked by 7% excluding pensions. While India’s defence budget for 2020-21, including pensions, constituted 15.5 per cent of the central government’s expenditure plan, China’s reported defence allocation was 36.2 per cent of its budget.