Until 1962 defense spending was deliberately limited. In the wake of the war with China, defense spending rose from 2.1 percent of the gross national product (GNP--see Glossary) in fiscal year (FY--see Glossary) 1962 to 4.5 percent in FY 1964. In FY 1994, defense spending was slightly less than 5 percent of gross domestic product (GDP--see Glossary). In terms of dollars, FY 1994 total defense services expenditures were projected at US$7.2 billion (but are likely to have been close to US$7.8 billion). Proportionately, based on figures provided by the government, 48.4 percent of expenditures were for the army, 15.7 percent for the air force, 5.9 percent for the navy, and 30 percent for capital outlays for defense services and defense ordnance factories. The latter provide matériel to the armed forces through some thirty-nine ordnance factories and eight public-sector enterprises that build ships, aircraft, and major defense items. The defense budget for FY 1994 was 6.5 percent higher than the revised estimate for FY 1993. The allocation increased to 14.9 percent of the total central government budget, up from 13 percent in the previous two fiscal years. Nuclear energy and space research are not fully accounted for in the defense budget, but most paramilitary forces fall within the purview of the Ministry of Defence.

Organization and Equipment of the Armed Forces

Data as of September 1995