Expressing concern over the slow pace of modernisation of the armed forces due to inadequate funds, a parliamentary panel has pulled up the Government on the Finance Ministry’s reluctance to create a non-lapsable fund for Defence expenditure.
In a report tabled in Parliament on Monday, the Standing Committee on Defence also noted that though the Defence Ministry projected a requirement of Rs 1.72 lakh crore under capital budget for 2018-19, only Rs 93,982 crore was allocated by the Finance Ministry. The allocation under capital budget not only fell far short of projections by Ministry of Defence, but the allocation does not even cover committed liabilities, the report said.
The parliamentary body also criticised the Finance Ministry for its reluctance to create a ‘Non-Lapsable Capital Fund’ for defence forces. Under current norms, the unspent budget allocation in a fiscal year goes back to the Finance Ministry. The armed forces have for a long time sought that unspent funds be kept in a non-lapsable pool so that capital acquisition can be made using it.
“The very fact that the allocation of resources under capital budget for the year 2018-19 (Budget Estimate) which is not even sufficient to cover committed liabilities leaving alone new projects and other capital requirements strengthens the Committee’s case for creation of such a fund,” the report said.
The committee said in 2018-19, the shortfall was Rs 17,756 crore for the Army, Rs 15,691 crore for the Navy and Rs 41,924 crore for the Air Force. It also noted the submission by the Vice Chief of Army Staff (VCOAS) before the committee that the marginal increase in capital budget allocation for Army had dashed hopes for modernisation.
“The Committee were particularly alarmed to note from his oral evidence that although the Ministry of Defence had delegated financial powers up to Rs 14,097 crore to the VCOAS towards security related issues, there was no separate allocation for this in the Capital Budget allocation in 2018-19,” it said.
“Hence, the Ministry is left with no other option but to reduce resources for security of military stations or compromise on other acquisitions,” the committee said.
On allocation of funds for defence forces, the panel said the expenditure incurred was Rs 10,81,644 crore during 12th Five Year Plan as against a projection of Rs 11,39,000 crore.