The Hindu : National : Hike in allocation for armed forces

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Friday, Jul 09, 2004

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National

Hike in allocation for armed forces

By Sandeep Dikshit

NEW DELHI, JULY 8. The Government has proposed a massive hike of Rs. 11,000 crores for purchasing new equipment for the armed forces, even as a quiet burial has been given to the previous Government's proposal to set up a non-lapsable rolling fund for capital equipment purchases.

Most of the increased allocation (compared with February's interim budget proposals) will cover the payouts for the massive defence import contracts signed by the Vajpayee Government as well as make allowances for a couple of major defence deals that are in the final stages. According to the Finance Minister, P. Chidambaram, the higher allocation on capital equipment purchases will help eliminate all delays in modernisation of the defence forces. "Having regard to the trend of defence capital expenditure in recent years, it has become necessary to make a higher allocation this year. Accordingly, I propose to increase the allocation for defence to Rs. 77,000 crores which includes an allocation for capital expenditure of Rs. 33,483 crores.'' The Government has retained the substantial increase under the head of "research and development" proposed by the previous Government.

The budget has also retained the previous Government's allocations for the Defence Research and Development Organisation and ordnance factories. Minor tinkering has been done in the outlay for the armed forces while that for the Coast Guard has been kept at the levels proposed in the interim budget.

In the case of allocations for capital equipment — the only area where the Government has made a departure from the interim budget — the bulk of the increase is for purchase of aircraft and aero engines for the Indian Air Force (up by Rs. 7,500 crores) and the Navy (Rs. 900 crores), augmenting the fleet (Rs. 1,400 crores) and equipping the Army (Rs. 900 crores), IAF (Rs. 400 crores) and Navy (Rs. 130 crores).

In the same section, the outlay under the head "construction" for all the three Services has been reduced substantially but the sharpest cut of 25 per cent is for the Army. While the allocation for naval dockyards remains the same, the Army will get more funds to purchase heavy vehicles. However, the outlay for Joint Staff has been cut by Rs. 28 crores.

The outlay for the Defence Ministry at Rs. 886.35 crores is exactly the same as proposed by the previous Government. In case of defence pensions, the allocation understandingly remains at Rs. 11,250 crores.

More pay, allowances

Taking up sectoral outlays (excluding allocation for capital purchases), in the case of the Army, the new Government has improved the Vajpayee-led Government's allocation by Rs. 200 crores. Pay and allowances for the Army personnel have been increased by Rs. 200 crores while the allocation for stores has been reduced by Rs. 350 crores. The outlay for works has gone up by Rs. 200 crores while the Rashtriya Rifles will receive an additional Rs. 10 crores.

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