Se La tunnel, security for Army bases, war reserves, Make in India, vehicles and surface-to-air missiles are just some important projects that’ll suffer.
One of the strongest ever summarisation of the state of the Army and its acute shortage of funds raised eyebrows this week, given the on-record statement of the Vice Chief of Army Staff that the budget allocation this year has ‘dashed all hopes’ for modernisation.
While the Army’s frank assessment hit the headlines, a series of startling reports of the parliamentary standing committee on defence show the real impact India’s spiralling defence budget planning is likely to have.
From a lack of resources for emergency purchases, to stalled roads and projects on the China border and depleted war reserves, brutally honest assessments have been shared with the panel headed by veteran BJP leader and retired Army officer Maj. Gen. B.C. Khanduri.
The state of affairs – where defence is allocated a bare-minimum budget to get along – is likely to continue, with one particular standing committee report revealing that even a plea made to the Prime Minister’s Office (PMO) by the defence ministry when it was led by Manohar Parrikar went unheard.
“The matter of shortage of fund was taken up with Prime Minister’s Office vide MoD ID No. 1(3)/Fin(Bud-II)/2016 dated 02.02.2017. It is not known whether PMO has made any reference to Ministry of Finance in this regard. This Ministry has not received any additional allocation subsequent to taking up the matter with PMO (sic),” a top MoD bureaucrat is quoted as saying.
Here is a look at things that are unlikely to go ahead in the immediate future, given the resource crunch that is set to remain:
Se La tunnel
One of the most ambitious projects to be impacted due to a lack of resources, ironically, is something that was announced by the finance minister in the Budget speech. The minister said that allocations are being made to construct a new tunnel at the Se La (pass) in Arunachal Pradesh, that will cut down travel time to Tawang by over an hour, besides giving all-weather access for troops to the China border in the disputed region. The minister also spoke of the tunnel giving a boost to tourism in the region.
However, in his testimony to the parliament panel, defence secretary Sanjay Mitra shared that additional budgetary support would be required for the Border Roads Organisation if the project is to be executed.
“There are problems, obviously. Particularly in this case, if we get additional support, we will be in a position to make a big impact on the Indo-China Border Road. If you are aware, Finance Minister told us to make Sela Pass. If we have to do this project, we will need additional fund. The DPR is ready; additional fund should be given immediately for Sela Pass project (sic),” the defence secretary said.
Base security
A priority area for the government has been to improve the security of Army bases and camps in Jammu and Kashmir and adjoining areas, after a series of targeted attacks by Pakistan-backed militants. Each attack that results in Indian casualties is followed by announcements by the defence ministry that security will be enhanced with modern equipment for perimeter defence.
However, the Army has officially informed the parliament panel that while the Vice Chief has been authorised to spend thousands of crores for such projects, the actual allocation of the money has not taken place. In effect, the Vice Chief can select or process the purchases, but will not be able to actually place orders due to the lack of funds.
“The Ministry of Defence has again delegated powers to the VCOAS to spend as much as Rs 14,097 crore towards security related issues. However, there is no separate allocation for this,” a senior Army representative told the panel.
War reserves
Another stated focus area was the building up of war reserves for the Army, particularly after the surgical strikes in Pakistan-occupied Kashmir (PoK) and the long stand-off with the Chinese at Doklam last year.
The Army, however, informed the panel that building up these 10-day war reserves is going to be difficult, given a budget shortfall of Rs 6,380 crore, or nearly a billion dollars. This, even as some contracts are nearing conclusion.
“The Committee were apprised that in order to maintain critical availability of reserves for at least 10 days at any time, government has delegated financial powers. As a part of this exercise, contracts are in the final stages of conclusion. For this purpose, the cash outgo is Rs 2,246 crore. Further, it was informed that on this account, that against a total projection of Rs 9,980 crore, allocation is Rs 3,600 crore. So, short fall is Rs 6,380 crore (sic),” the report said.
Make in India
The government’s flagship Make in India plan that envisioned defence as its cornerstone will be yet another area of impact. To dispel the common misconception that making military equipment in India will reduce costs, it should be made clear that in the initial few years, higher allocations are required. This is because in the first few years that Indian manufacturers begin to make weapons, their research and development costs, expenses to set up infrastructure, and a lack of scale will drive up costs.
The Army believes that several of its ambitious Make in India projects will be delayed, including the long-running future infantry combat vehicle contract.
“Army have identified as many as 25 projects for Make in India. However, there is not adequate Budget to support this. As a result of which, many of these may end up foreclosed. In the Army we are looking forward to manufacturing the future ready combat vehicle, FRCVs, and FICVs through these schemes. However, with the kind of Budget that has been allocated, this may get delayed by a few years. I am not sure what is going to be their future (sic),” the Vice Chief of Army Staff told the panel.
Vehicles & surface-to-air missiles
The Army also listed two immediate new acquisitions that are likely to be deferred due to budget constraints. One of them is the critical requirement of man-portable surface-to-air missiles for the infantry to defend critical infrastructure and troop formations.
The Very Short-Range Air Defence System (VSHORAD) is listed as a project that will be impacted, along with the ongoing project to acquire light specialist vehicles needed to move infantry troops around in hostile battlefield situations.
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