Defence ministry seeks additional Rs 20000 cr for procurement

Bruno Cirelli
Agosto 10, 2017

The demand for additional money comes at a time when the face-off between Indian and Chinese troops in Doklam in Bhutan has entered the 8th week and the borders with Pakistan remain unusually active.

The Defence Ministry has sought additional allocation of Rs 20,000 crore primarily for procurements, as a substantial part of its budget has already been exhausted due to speeding up of acquisitions, said informed sources.

"The MoD officials said nearly 50% of the capital and 41% of the revenue outlays in the defence budget had already been utilized in the ongoing fiscal".

Early this year the custom duty exemption for imports made by the Defence Ministry was removed. Moreover, the bulk of the capital outlay is earmarked for "committed liabilities or instalments" for deals inked earlier. The Rs2.74 lakh crore outlay also works out to just 1.56 per cent of the projected GDP, the lowest such figure since the 1962 war with China.

The armed forces, in fact, want the annual defence budget to progressively reach at least 2% of the GDP for their operational requirements.The actual defence budgets, however, have shown a marked trend towards declining modernisation budgets, unspent funds and a skewed revenue to capital expenditure ratio, which have meant the Army, Navy and IAF continue to grapple with critical operational gaps on several fronts.

While the Army has operational deficiencies in artillery guns, infantry weapons, light helicopters, night-fighting capabilities and the like, the Indian Air Force does not have enough fighters, mid-air refuellers, AWACS (airborne warning and control systems) and drones.

Prior to that financial powers were delegated to the Army's Vice Chief to make hardware procurements up to Rs 40,000 crore to meet critical deficiencies after the force identified critical deficiencies in 46 types of ammunition and certain spares for 10 types of weapon platforms.

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