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Only 1.82% hike in defence budget could hurt military acquisition & modernisation plans

In Union Budget 2020, defence pension sees the biggest jump with a 13.6% increase against the 2019-20 revised estimates.

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New Delhi: Finance Minister Nirmala Sitharaman Saturday increased India’s defence budget by a mere 1.82 per cent to Rs 3.37 lakh crore, excluding expenditure on pension. The allocation isn’t enough for a military that has been forced to cut back on its procurement and modernisation plans due to lack of funds.

The increase in comparison to the revised estimates of 2019-20, even if meagre, is a departure from July 2019 when Sitharaman chose to make no change from the interim budget despite the Balakot airstrikes in February and the subsequent air battle with Pakistan. The clash had brought to light a big capability gap in India’s defence.

Out of a total outlay of Rs 30.42 lakh crore in Union Budget 2020-21, the finance minister has earmarked Rs 4.71 lakh crore for defence, including pensions, which works out to be 15.5 per cent of the entire expenditure plan of the central government.

The 2020-21 budget for pensions, one of the main expenditure components of the defence ministry, stands at Rs 1,33,825 crore — 13.6 per cent increase from the revised estimates of Rs 1.17 lakh crore. This is higher than the hike given in revenue and capital funds for the forces.

The capital budget for the military, which is used for new acquisition and modernisation, has seen an increase of just 3 per cent, or Rs 3,400 crore, over the revised estimates.

While it was initially estimated at Rs 1,03,394.31 crore for 2019-20, the revised estimates came slightly higher at Rs 1,10,394.31 crore. In the 2020-21 budget, an amount of Rs 1,13,734 crore has been earmarked under capital expenditure.

The capital allocation to the IAF, which is in the midst of buying nearly 200 new fighter aircraft, has actually been lowered from revised estimates of Rs 44,869.14 crore to Rs 43,281.91 crore.

Also read: 15th Finance Commission to set up expert panel to look at roll-on fund, cess for defence

The modernisation woes

The Union Budget 2020-21 outlay leaves the tri-services — Army, Navy and the Air Force — with little room for modernisation and procurement of new weapons and systems.

The forces have been struggling due to such budgetary constraints. For instance, the Navy has been forced to rework its plans to become a 200-ship strong force by 2027 due to cash crunch. According to its new plan, the Navy is now aiming to be a 175-ship strong force by then. This comes at a time when the Chinese People’s Liberation Army (PLA) Navy is undergoing a massive modernisation of its fleet.

In December 2019, Navy Chief Admiral Karambir Singh had pointed out that the Navy’s share of the defence budget decreased from 18 per cent in 2012-13 to a mere 13 per cent in 2019-20.

“China is moving at a pace it is capable of. We are moving at a pace we are capable of. Our (Indian Navy) aim is to get maximum bang for the buck,” Singh said at his annual press meet in response to a question by ThePrint.

But it’s not just the Navy that is feeling the heat due to severe funds crunch. The Air Force is feeling the pinch too, with its current squadron strength of fighters coming down to just 28, despite a sanctioned strength of 42.

From new 114 fighters to transport planes to replace aging Avro fleet and mid-air refuellers, the IAF has been forced to go slow on all such programmes due to budgetary constraints.

In a scathing report in January last year, the Parliamentary Standing Committee on Defence had criticised the Narendra Modi government for inadequate allocation of budget to the Army.

The panel had slammed the government for allocation under the capital budget for 2018-19 falling short of the projections made by the defence ministry, the Economic Times had reported.

Also read: Lower income tax rates but no deductions — Modi govt creates optional second tax system


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  1. All defence pensioners are very comfortable now . In fact retired officers of Major and above are getting so much money , they are forced to spend it by taking various tours overseas to Europe, USA etc ! All this will come home to us when we find that in an actual action we are not as strong as we boasted we are. At that stage the retirees will not be able to help us out. Time the Govt decided to cut the pensions by 30% at least for those getting Rs 50000 and above per month.

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