Defence budget for 2018-2019 may see a modest hike of ten to 12 per cent to enable the armed forces to meet contractual obligations for deals already inked. While the increase may not seem impressive but the Government will provide for funds for any emergency requirements to ensure that operational readiness is not hampered.
The allocation for the last fiscal was Rs 2, 74,114 crore including Rs 86,488 crore for capital expenditure. The overall hike last fiscal was about six per cent over the budget for 2016-.2017. Moreover, the armed forces could not exhaust the entire capital budget for 2016-2017 and an amount of more than Rs 7,000 crores was returned to the Government's kitty. The situation is same for this fiscal but officials are hopeful that the capital budget may also get a jump of ten per cent. In fact, except last year, the increase in defence budget was always pegged between ten to 12 per cent. Incidentally, the defence allocation has always remained less than two per cent of Gross Domestic Product(GDP). Moreover, the last defence budget did not include pensions amounting Rs 85,740crores. Also, the revenue expenditure was Rs 1,72,774 crores. This budget takes care of salaries of armed forces personnel, maintenance of equipment and weapons and running cost including petrol and diesel for all the weapon platforms.
The Defence Ministry for the last few years is urging the government to have a separate corpus of defence funds apart from budgetary allocations. However, the Government so far has not seen merit in the case and has assured the armed forces of out of turn funds in case of urgent operational needs.
While justifying underutilisation of capital budget, officials said here on Tuesday gestation period for finalizing defence deals take a long time leading to delays. Therefore, the funds allocated for capital acquisitions are not spent and returned to the government. Notwithstanding this situation almost every fiscal in the past, the Government has always allocated additional funds during the financial year to sustain the ongoing modernization drive, they said.
As regards the likely allocation for the next fiscal, they admitted the anticipated hike will take care of inflation. Moreover, the armed forces will have to honour contractual liabilities for deals already signed. Some of the big ticket items include Rafale jet deal worth over 6.5 billion Euros for 36 aircraft, P-8I long range maritime reconnaissance aircraft for Navy, C-130J medium transport aircraft and C-17 heavy lift transport aircraft, medium range surface to air missiles, M-777 ultra light howitzers, Apache attack helicopters and Chinook heavy lift helicopters.
Apart from these committed expenditures, the project to raise a Mountain Strike Corps by the Army to secure northern borders with China project is on. Besides raising this corps of more than 40,000 personnel trained to fight in mountains, the Army also needs attack helicopters, howitzers and other specialized weapons which are light and can easily be transported to forward posts along the line of Actual Control(lAC).
Similarly, the Army has to urgently procure ammunition as it is facing critical shortage. In a report, the Comptroller and Auditor General(CAG) also noted that the Army has ammunition for only ten to 15days to fight an intense war. .
