Thursday, February 9, 2012

MoD spends complete defence budget, wants more

New Delhi, December 24: After a decade of lost modernization with sluggish acquisition processes resulting in unspent defence budgets year after year, the Indian Defence Minister AK Antony has managed to completely spend the defence budget for second consecutive year. In fact for the year 2011-12, the defence ministry has asked for an additional grant of over Rs. 3,000 crore.

The defence ministry will need more funds as crucial deals like procurement of 126 Medium Multi Role Combat Jets for an estimated value of Rs. 48,000 crore slated to be finalized this year.

“The Indian Armed forces are entering the biggest modernization phase. And the spending of the complete defence budget for the second consecutive year is reflection of this,” sources said. “The defence ministry has already asked the finance ministry for an additional grant of Rs. 3,200 crore for ongoing financial year,” sources added.

The total budget allocated for the year 2011-12 was Rs. 1,64, 415 crore, which comes out to be 2.5 percent of the GDP. Out of this Rs. 95, 216 crore was revenue expenditure and Rs. 69,199 crore meant for modernization of the armed forces. The Indian Air Force (IAF), which is on a purchasing spree of fighter jets, transport aircraft and upgradation of existing fleet got the biggest share of the pie with Rs. 29, 722 crore. Army got Rs. 18, 988 crore and Navy’s share was Rs. 7, 320 crore.

The biggest defence deals inked this year are the upgradation of French Midage-2000 fighter jets at the cost of USD 5.8 billion and purchasing of 10 C-17 Globemaster-III airlifter for USD 4.1 billion. The other big-ticket deals expected to be inked in the current financial year are 75 trainer aircraft for USD 1 billion, 197 utility helicopters for USD 750 million, 22 attack choppers valued at USD 600 million, various artillery guns worth USD 2.17 billion, GE F414-INS6 engines for indigenous Light Combat Aircraft (LCA) Tejas and Harpoon anti-ship missiles estimated at USD 170 million. 
Besides this about 40 warships of the Indian Navy, including refurbishment of an aircraft carrier and nuclear-powered submarine, are under construction at home and abroad.

There has been a clamour from the Indian think tanks to hike the country’s defence budget to at least 3 percent of the country’s GDP in the wake of the huge defence spending by China and Pakistan. But the piling amount of unspent modernization budget has been the main impediment in way of this hike. Analysts feel that this complete spending of the budget would pave the way for an increased allocation for armed forces.

While Antony’s performance in the last and present year has been laudable, he did not fare any better in the first few years of his tenure. In 2006-07 his ministry failed to spend Rs. 3,000 crore, next year in 2007-08 the amount increased to Rs. 4,117 crore. In 2008-09 the budget surrendered increased to Rs. 7,007 crore and about similar amount was returned in 2009-10.

During the tenure of George Fernandes, the defence ministry returned Rs. 9,000 crore in the year 2002-03 and Rs. 5,000 crore in the year 2003-04. The unspent money was more glaring as it came in the backdrop of the Kargil conflict in May-June 1999 that laid bare the lacunae in the modernization of the armed forces. It was only in the year of Kargil War 1999-2000 that the defence ministry spent Rs. 3,000 crore more than its allocation of Rs. 45, 694 crore.

Pranab Mukherjee became the next defence minister in 2004 when Congress-led UPA government came to power. The performance was slightly better as he managed to come close to spending the complete Rs. 77,000 crore of defence budget allocated in 2004-05. However in the next year 2005-06, the ministry surrendered Rs. 1,300 crore.

No comments:

Post a Comment