The Hindu : Front Page : Defence spending to cross Rs. 1-lakh-crore mark

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Saturday, Mar 01, 2008
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Defence spending to cross Rs. 1-lakh-crore mark

Sandeep Dikshit

NEW DELHI: The country’s defence spending for the first time will cross the Rs. 1 lakh crore mark but the old failing of being unable to spend the allocated money to purchase large equipment remained belying Defence Minister A. K. Antony’s confidence in this regard.

The budget for 2008-09 has allocated Rs. 1,05,600 crore for the defence sector, against the current fiscal outlay of Rs. 96,000 crore. But the increase would be well above the Rs. 10,000 crore because the Defence Ministry was unable to spend Rs. 4,217 crore on the capital account (purchase of big defence platforms) alone.

Although revenue account allocations for the three Services overshot the budgeted amount by modest amounts, the actual increase (not adjusted for inflation) would be close to 14 per cent.

The reason for not spending the entire amount of Rs. 41,922 crore for capital purchases was the cancellation of some big ticket tenders for helicopters and missiles.

The Ministry is attempting to instead purchase over 300 additional T-90 tanks from Russia and could provide some additional allocation if talks on extra payment for aircraft carrier Gorshkov are successful. However, these would be inadequate to make up for the unspent funds due to the cancelled contracts.

Highest outlay

An analysis of capital outlay shows that during the next fiscal, the highest outlay for buying major equipment will be for the Indian Air Force (IAF) - over Rs. 19,000 crore, against its spending of over Rs. 14,000 crore this year.

The Army is marginally ahead of the Navy with a proposed allocation of over Rs. 12,000 crore, against Rs. 11,000 crore, while the Navy will get over Rs. 11,000 crore, against its spending of about Rs. 8,000 crore.

This does not take into account several sub-heads such as joint staff, special projects, research and development, etc. During this fiscal too, the highest outlay of Rs. 16,500 crore was for the IAF, followed by Rs. 11,374 crore for the Army and just over Rs. 10,000 crore for the Navy.

Aviation assets

The Navy gets nearly Rs.1,800 crore next fiscal, against the spending of just Rs. 400 crore under the aircraft and aero-engine category although the original outlay was over Rs. 1,900 crore.

The IAF will also get nearly Rs. 2,000 crore over and above the Rs. 9,500 crore it spent in this fiscal. Add to it the allocation for the Army under this head, the inescapable conclusion is that the armed forces are poised to purchase heavy quantities of aviation assets – about Rs. 15,000 crore. But the bad news for the Army is that its allocation under this head was cut from budget estimates of Rs. 1,000 crore this fiscal to Rs. 426 crore in the next.

In the other equipment category (missiles etc.), the Army gets Rs. 2,700 crore more than the amount proposed to be spent this year, while the IAF will get a substantially higher amount.

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