The Union Budget for the Financial Year 2010-11 presented by Finance Minister Pranab Mukherjee on Friday has left the armed forces disappointed, with what is being perceived to be its lack of attention towards modernization of weapons and equipment, and force accretion as required by existing threat perceptions and imperatives of defense preparedness.
An amount of Rupees 147,344 crore has been earmarked for defense out of a total outlay of Rupees 1,108,000 crore approximately, almost 13.3 per cent of the budget.
While the Budgetary Estimate for defense last year (Financial Year 2009-10) was Rupees 141, 703 crore, the Revised Estimates brought that figure down to Rupees 136,264 crore. This year’s allocation has seen a 3.98 per cent growth over last year’s Budgetary Estimate and an 8.13 per cent growth over the Revised Estimate.
Rupees 87,344 crore from the defense budget has been allocated for revenue (net) expenditure and Rupees 60,000 crore for capital expenditure this year. While the the latter figure is key for facilitating force modernization, the former decides the capacity for accretion of force levels.
There is a growth of 0.54 per cent in the allocation for Revenue Expenditure. This apparent growth is also largely in name only, considering inflation. A serving officer, who declined to be identified for the purpose of this report, told StratPost that this minuscule percentage would abort any hope of force accretion this year by precluding the possibility of enhancing the rates of recruitment of officers and other ranks.
This becomes especially significant in the backdrop of the worsening shortage of officers that the army is already experiencing, as well as the planned raising of two additional divisions.
Retired artillery officer and Director of the Center for Land Warfare Studies, Brigadier Gurmeet Kanwal says, “The defence budget announced today is disappointing. Actually there is no hike in the defence budget this year as the marginal increase over last year’s Budgetary Estimate figure (Rupees 141,703 crore) is less than the annual rate of inflation.”
Growth in the Budgetary Estimates this year for capital expenditure has seen a hike of 9.44 per cent from that of 2009-10. Furthermore, the amount of some Rupees 5,439 crore returned unspent last year has also called into question the system of budgeting for defense, because of the adverse impact on defense procurement. Brigadier Kanwal says, “The Ministry of Defense is once again surrendering about Rupees 5,000 crore from the capital acquisitions account in the Financial Year 2009-10. This will have a deleterious impact on modernization. In order to ensure that funds earmarked for military modernization do not lapse year after year, it is essential to institute a roll-on ‘defense modernization fund’. The plea that the rules of business do not allow it is facetious as such a provision had existed during the British Raj.”
Sources in the armed forces agree and say that defense procurement has suffered because of these systemic deficiencies and also cite instances where, subject as it is to the vagaries of Indian bureaucracy, has also been held hostage by often unclear allegations of corruption that may be whispered across enough to stall defense procurement tender processes.
The armed forces have hoped for movement on their long-delayed plans for modernization, with the army, for instance, especially keen on placing orders for artillery guns in the light of the depletion of strength and wear and tear of existing artillery, as well as on satisfying their requirement for armor. While on the face, the processes for the acquisition of much of the materiel are underway, albeit sputtering at different stages, the armed forces constantly worry about the delays in procurement caused by the abuse of the system of checks and balances and subsequent hijacking of the tender processes, that can eventually lead to budgetary allocations for capital expenditure being returned unspent, year after year.
Note: 1 crore = 10 million