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Faced with budget crunch, Navy could relook at long-term modernisation plans, lease vessels

Navy had planned to become a 200-warship force. It cut down this number to 175. Security circumstances may now lead the Navy to recalibrate capital procurements.

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New Delhi: The Navy will have to recalibrate its immediate and long-term capital requirements, particularly in view of the threats from China after over a nine-month standoff in eastern Ladakh, a top Naval officer said.

This will likely include reassessing the numbers for landing platform docks (LPDs) and minesweepers originally planned by the Navy, among other items, for which the acceptance of necessity (AoN) has already been accorded.

In the wake of a dwindling capital budget in the last few years, the Navy cut down its plans to be a 200-warship force — down to 175 — and reduced the numbers of some of its long-term planned procurements.

During a press meet in 2019, Navy chief Admiral Karambir Singh had pointed out that the Navy’s share of defence budget fell from 18 per cent in 2012-13 to 13 per cent in 2019-20. “It is a fact that our budget has decreased. We have projected this. Our hope is that we will get some money and accordingly we will prioritise,” Singh had said.

The force cut down the number of LPDs it was seeking to buy to two from the planned four, and the number of minesweepers to eight from 12, aside from cutting down on other fleet auxiliary ships.

The Navy also decided to procure only six Kamov KA-31 early warning helicopters against the 10 planned originally, and brought down the number of additional P-8I aircraft it sought to buy from the US to six from 10. Moreover, it reportedly planned to close the cadet training ship programme.

However, irrespective of the Navy’s plans to bring down the numbers of its planned procurements as envisaged in its Maritime Capability Perspective Plan (MCPP) for 2012-2027, the AoNs for many of its big ticket procurements were already approved. Since the AoNs exist for certain planned procurements, there is possibly of going back to the original numbers planned.

“…there is a need for a relook and a reassessment of the Navy’s immediate and long term capital requirements as planned earlier, for which there would be a requirement of more funds,” said the officer quoted above.

The officer declined to comment on the specifics of which other capital procurements would need a reassessment.

In the capital budget for 2021-2022, the Navy saw an increase of 24.6 per cent at Rs 33,000 crore from its previous year’s allocations, but it was much lower than the force’s projected requirement of Rs 70,920.78 crore.

The Army saw an increase of 12.6 per cent and the Air Force saw a hike of 22.9 per cent in their capital budgets for 2021-22 as compared to the previous fiscal.

Speaking about the 15th Finance Commission’s proposals, which suggested raising funds from defence land monetisation, the officer said it is yet to be seen how the concept can be materialised.

“The monetisation of defence land will yield some funds, which would be used up immediately for some immediate procurement. But this way, we will lose the land and the funds too will be exhausted immediately,” the officer said.

Also read: Army, Navy, IAF to jointly train for nuclear biological chemical warfare and intelligence

Considering leasing vessels

The Navy could also be looking at leasing vessels as an interim measure. This includes diving support vessels that can also double up as a submarine rescue vessel.

“The Navy is looking at leasing different kinds of vessels, including diving support vessels and other smaller ships,” said the officer quoted above.

The force is also looking at leasing small fuelling tankers, which can be used for support trips and other logistical purposes.

Besides, the Navy is in the process of gathering information from other countries from where it could lease minesweepers and naval utility helicopters as a stop-gap arrangement, even as it will continue to pursue the original contract for such systems to be made in India with foreign collaboration, said sources.

The Navy currently has on lease two Sea Guardian drones from a US firm, and a logistics ship from an Indian private firm for travel between Kochi and Lakshadweep.

Also read: Anil Ambani’s Reliance firm still not ready to showcase LMG for Army, trials delayed again


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