A new order by the Narendra Modi government putting a price cap on the vehicles that can be bought by the armed forces from the subsidised Canteen Stores Department has upset many. A cap has also been put on how frequently cars can be purchased from the stores: one in eight years.
ThePrint asks: Can the govt dictate what cars military officers & veterans can buy from the canteens?
Armed forces are trying to control CSD expenditure in order to prevent overshooting budget
Senior associate editor, ThePrint
No, the government cannot dictate what cars military officers and veterans buy. But yes, they can dictate what cars they can choose from when it comes to the government-given subsidy.
There is no restriction on the kind of cars that can be bought from the open market, just like how you and I will buy one.
If an officer has the money, she is free to drive a BMW or a Porche. But when it comes to buying it through the government subsidy route, the MoD and the Army headquarters can certainly decide what cars can be bought because at the end of the day, subsidy means a loss to the exchequer.
An officer, other personnel, and veterans can save a minimum of Rs 75,000 when they buy their vehicles through the Canteen Stores Department (CSD).
Military personnel get an exemption from GST on the value of the car in addition to the regular cash benefits.
Interestingly, Army authorities say that while last year the auto sales decreased across the country, sale through CSD increased by 40 per cent.
Last year, the CSD sold cars worth Rs 6,000 crore. However, the heavy volume of transactions resulted in a carryover liability of Rs 4,500 crore to car manufacturers.
With the new restrictions, the Indian armed forces are aiming to control the expenditure of the CSD in order to prevent the budget from being overshot.
Govt’s decision on what cars can be bought from canteens will affect morale of armed forces
Special correspondent, ThePrint
The government’s decision to interfere in what cars military officers and veterans can buy from the canteens will adversely affect the morale of the armed forces.
Not only will it be seen as a move to curb their privileges, but also as an attempt to dictate their right to buy a car of their choice, which they can afford.
Despite all their exaggerated references to the armed forces, the move also portrays the Narendra Modi government as one that is against armed forces, especially because it comes amid debates of the same government opposing the NFU (non-functional upgrade) for armed forces, which they have been demanding for years now.
Before implementing any such move, the government should have warned the rank and file of the forces about the move, because lack of transparency about such impending decisions related to them and their basic privileges, such as buying a car of their choice, is hurting the armed forces.
It is doubtful if the government carried out a proper cost-benefit analysis before deciding on this move.
In such a situation, there would be little saving, even as it would make the armed forces disillusioned.
Armed forces blessed with a lot of facilities and privileges. Okay if govt puts brakes on some
Journalist, ThePrint
If the government is planning to curb the budget of Canteen Stores Department, they obviously can. The armed forces are blessed with a number of facilities, and can avail groceries, cars, branded suitcases, sunglasses, shoes from canteens at a subsidised rate.
I remember when I was a kid, I used to see these big army trucks parked outside officers’ quarters, and helpers carrying packets of milk and eggs from those trucks. Even though this facility has been stopped, no one can deny the massive privileges it afforded.
So, the argument that the government should not take away the ‘few joys given to the army’ is unacceptable. They have been given a lot. And it is not like this move has put brakes on all the rights of the armed forces. Cheap cars will still be available, but no more preferred vehicles, and no bragging about Jeeps and SUVs.
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Perks and incentives are an integral aspect of the romanticised army way of life
Journalist, ThePrint
According to officials, these new restrictions have been imposed to regulate and balance the CSD budget. But this imposition is creating resentment amongst the members of armed forces, both serving and veterans. In an ideal scenario, the government can dictate the kind of cars that can be purchased by officers. However, imposing restrictions on subsidies provided to armed forces is a difficult line to take since it suggests that one is devaluing their services to the country.
Even within these subsidies there are certain segregations. The officers can buy a vehicle valued up to Rs 12 lakh from the canteen; the jawans, on the other hand, can buy a car up to worth Rs 6.5 lakh. This difference can create bitterness among the members of the armed forces. One way to avoid this would be to subsidise a standard amount, instead of subsidising on car models specifically.
Additionally, canteens and other subsidies have always operated as perks for young men and women to join the armed forces. These incentives are an integral aspect of the romanticised Army way of life. It is imperative that these subsidies aren’t restricted in order to keep the morale of defence forces up.
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This issue points to a broader problem: India’s terrible habit of living beyond its means
Reporter, ThePrint
There are two distinct issues here.
First, members of the Indian armed forces make invaluable contributions to the country, and they do so at relatively meagre salaries. In such a scenario, it is only fair that essential goods are provided to them at subsidised costs, through Canteen Stores Department (CSD).
Second, while the state is paying for their essential utilities, it doesn’t need to do so for non-essential and luxury goods, such as cars. This is not to say that Indian soldiers don’t deserve to drive the cars they like. They, of course, do.
The problem is the Indian state can’t afford such expenditure.
Last year, the CSD sold cars worth Rs 6,000 crore and had a carryover liability of Rs 4,500 crore to various automobile manufacturers. These liabilities account for nearly 1.5 per cent of India’s defence budget.
At a time when the central government’s fiscal space is rapidly shrinking, it is understandable that price caps are being imposed for military personnel buying cars from CSD.
This issue, in a way, points to a broader problem: India’s terrible habit of living beyond its means.