Big shopping for armed forces

BUDGET & THE ECONOMY

11.6 per cent hike in the Defence Budget sees the IAF and Navy get Rs 10,200 crore and Rs 1,965 crore, respectively, to buy aircraft.

The UPA government increased its defence budget by 11.6 per cent largely because the previous year's allocation of Rs 89,000 crore could not be spent in time.

Defence spending went up to Rs 96,000 crore from the previous year's budgeted allocation of Rs 89,000 crore. However, documents reveal that what was actually spent was just Rs 86,000 crore. Therefore, in real terms, the increase in the current budget is 11.6 per cent or Rs 10,000 crore.

A sum of Rs 41,000 crore has been allocated for capital expenditure against last year's budgeted figure of Rs 37,500 crore. This indicates that the Ministry of Defence had spent some, not all, of the capital outlay, as the revised estimates put the expenditure last year at Rs 34,500 crore.

Clearly, the services surrendered Rs 3,000 crore. The biggest chunk of surrendered funds was contributed by the Indian Air Force followed by the Army.

Nearly Rs 2,000 crore was returned by the Air Force on account of non- expenditure on aircraft "" an obvious indication that there had been no progress on the acquisition of the 126 fighter aircraft that the IAF wants.

The Army returned nearly Rs 1,800 crore, a sum that was required to buy equipment. However, the Army overspent in buying aircraft. It had a Budget allocation of Rs 1,300 crore, but spent Rs 2,015 crore. Otherwise, the surrendered amount may have been larger.

There is a modest increase this year in pay and allowances and pensions, indicating the services were not expecting the Pay Commission's recommendations to kick in this fiscal. The biggest expenditure slice, as always, was on account of equipment that the services want to buy.

This year's capital outlay has increased because of the aircraft purchase proposals by the Navy and the Air Force. A staggering Rs 1,965 crore has been allocated to the Navy to buy aircraft.

It was allotted Rs 1,172 crore in the last Budget but could spend only Rs 450 crore. This happened because the Navy delayed inking a contract for eight to 10 long-range maritime patrol aircraft. The force expects to do it this year.

Rs 10,200 crore has been allocated for the IAF to buy aircraft, a realistic figure as the service spent Rs 9,000 crore on it last year.

As expected, the Defence Budget has fallen short of the Rs 100,000 target the services had been hoping to touch. But Defence Minister AK Antony said the continued hike in defence expenditure signalled the UPA government's "resolve to go full steam ahead with the modernisation" of the military.

"I am satisfied with the commitment of providing extra funds made by the finance minister," he said.

Antony, however, said there had been some laxity in certain fields during the modernisation drive, and efforts would now focus on ensuring the upgradation of the arsenal of all three services.