NEW DELHI: Despite telling the Left parties that the outlay for the defence sector could not be trimmed, as every rupee of the allocated amount was required to enhance defence preparedness, the Defence Ministry has not been able to spend over Rs. 2,500 crore of the funds last year.

At a meeting of the Left-United Progressive Alliance (UPA) coordination committee meeting on February 24, 2005 — days before the budget was presented, Defence Minister Pranab Mukherjee told Left leaders that the Government disagreed with their suggestion to trim the expenditure.

But the Defence Ministry surrendered over Rs. 2,500 crore at the end of fiscal 2005-06 after some big-ticket purchases failed to materialise and the Finance Ministry imposed a cut of Rs. 1,300 crore, after a mid-year review showed slow progress of expenditure.

At the meeting, Mr. Mukherjee said a higher outlay was required to purchase more equipment, provide better amenities and enhanced pension to retired soldiers.

The Congress argued that the National Democratic Alliance (NDA) Government compromised on defence preparedness, as it was unable to spend Rs. 28,000 crore during its tenure.Going by the latest figures, Mr. Mukherjee too could not reverse the chronic problem of under-utilisation of funds by the previous Government. And, this after the UPA Government did not pursue the previous Government's proposal to set up a non-lapsable defence modernisation fund, so that unused funds earmarked for the previous financial year are rolled over for utilisation in the subsequent year, instead of returning them to the central exchequer.

According to officials, the Defence Ministry could not utilise Rs. 1,145 crore in 2004-05, the first full financial year of the UPA Government, and over Rs. 2,500 crore in the last fiscal (besides a cut of Rs. 1,300 crore during the mid-year review).

Though Mr. Mukherjee claimed credit for spending almost all the budgeted amount during 2004-05, the fact is that the NDA Government had firmed up most of the contracts signed during Mr. Mukherjee's first year as Defence Minister.

Official sources said the funds were surrendered last year because of slow progress of some cases, particularly on the Navy side. The negotiations were finalised but the approval from the Cabinet Committee on Security could not materialise. Had the approval come in time, the Ministry would have ended up spending more than the allocated budget, they said.

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