20 July 2011 08:15 am
Treasury Secretary P. B. Jayasundera said the country’s defence spending was further going down as there was no requirement to spend money on military hardware, the LBO reported.
In 2010, the defence spending fell to 190 billion rupees or 3.4 percent of GDP as the economy expanded compared from 3.9 percent of GDP in 2009.
“So this number is going down, because we no longer spend money on aircraft, buying ammunition or military hardware,” Mr. Jayasundera told members of the Joint Apparel Association Forum, an industry body.
“Probably we have to build little bit capital stock to have fairly high tech security. But since there is no war threatening the existence of the country itself, we can have planned defence expenditure like any other country which will also be conducive for national development,” he said.
He said defence expenditure which was about 5.0 percent of gross domestic product during the war years, has now dropped to 3.0 percent. “So we had fairly high defence expenditure, sometimes as high as five percent of GDP. It has now dropped to three,” he said.
For 2011 defence spending was originally slated at 214 billion rupees or 3.4 percent of forecasted GDP. But spending was upped last month by another 20 billion rupees to build a new defence headquarters, taking the share up to about 3.7 percent.
However the government is selling land where military facilities were earlier sited, to raise funds.
He also said that country is seeing a peace dividend in the form of lower interest rates, taxes, inflation and higher capital expenditure after a 30-year war ended.