In an effort to maintain operational preparedness by way of ensuring steady capital budget for procurements, the 15th Finance Commission held deliberations with the Defence Ministry here on Friday.
The meeting was held under the leadership of Rajnath Singh. The Finance Commission was headed by NK Singh.
During the meeting, the Defence Ministry gave its fund projections for the period 2020 to 2025 which is also the award period of the 15th Finance Commission. The Ministry informed the Commission about the allocated budget in comparison to the projections made. The Defence Ministry officials also apprised the Commission that it was exploring a number of alternative sources of funding, officials said here.
The meeting comes against the backdrop of rather low capital allocation over the successive years in the annual budget thereby impacting the acquisitions to sustain the tempo of modernisation.
Moreover, this meeting comes after a notification was brought out by the Ministry of Finance on July 29 this year following an Order made by the President of India.
By this Order, the Terms of Reference (ToR) of the 15th Finance Commission was amended and Paragraph 9A was inserted in the ToR namely “the Commission shall also examine whether a separate mechanism for funding of Defence and internal security ought to be set up, and if so, how such a mechanism could be operationalised.”
An allocation of Rs 3.18 lakh crore was made in this year’s budget for the Defence sector as against last year’s Rs 2.98 lakh crore.
Out of the total allocation, Rs 1,08,248 crore was earmarked for capital outlay to purchase new weapons, platforms and military hardware.
The revenue expenditure which includes expenses on payment of salaries and maintenance of establishments pegged at Rs 2,10,682 crore.
The Finance Commission assured the Defence Ministry that it would take into consideration all the suggestions made that would help to increase the overall capital space of the Ministry, bring about predictability and help in defence preparedness.
Besides the Defence Minister, the meeting was attended by Navy Chief Admiral Karambir Singh, Defence Secretary Ajay Kumar, Secretary (Defence Production) Subhash Chandra, Secretary (Ex-Serviceman Welfare) Sanjeevanee Kutty, Secretary, Department of Defence R&D and Chairman, DRDO Dr G Satheesh Reddy, Secretary (Defence Finance) Gargi Kaul, Vice Chief of Army Staff Lt Gen Devraj Anbu, Vice Chief of Air Staff Air Marshal RKS Bhadauria and Director General, Coast Guard Krishnaswamy Natarajan and other senior officials of the Defence Ministry.
