MoD, in fact, had asked for a hike in the revenue budget allocation (day-to-day costs and salaries) due to the increase in prices of POL (petroleum, oil and lubricants) as well as wages. "But what the finance ministry has done is to slash Rs 7,870 crore from the capital budget and transfer it to the revenue head," said an official on Thursday.
The overall defence outlay in the 2013-14 budget was pegged at Rs 203,672 crore, just about 1.79% of the projected GDP when military experts have been demanding at least 3% for several years now.
Moreover, revenue expenditure stood at Rs 1,16,931 crore out of the outlay, surpassing by far the capital one for new weapons, sensors and platforms at Rs 86,741 crore. As it is, a major chunk of capital budget allocated goes for "committed liabilities" every year, not leaving much for new projects.
India's military modernization takes place in a slow, haphazard manner in the absence of long-term strategic planning and fast decision-making, coupled with recurring scandals that derail critical projects time and again.
Now, with the capital budget being cut, the progress of different arms acquisition projects — several are pending for years — will also virtually come to grinding halt till a new government comes to office in the 2014-2015 fiscal.
From submarines to howitzers, air defence weapons to helicopters, the armed forces need them all to replace ageing weapons and stem the depletion in fleets. Some of the important deals close to being finalized this fiscal include the acquisition of 22 Apache attack helicopters (around $1.4 billion), 15 Chinook heavy-lift helicopters (around $ 1 billion), and 145 M-777 ultra-light howitzers ($885 million), all from the US.
But the "mother" of all defence deals, the almost $20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 French Rafale fighters, is still nowhere being inked despite the technical and commercial evaluation process for it kicking off way back in August 2007.
Under the MMRCA project, the first 18 jets were to come in "fly-away condition'' from France from 2016 onwards, while the rest 108 were to be subsequently manufactured under license by Hindustan Aeronautics Limited over six years. Grappling with just 34 fighter squadrons (16 to 18 jets each) when at least 44 are needed, the IAF is now hoping the contract is signed in the early-part of the 2014-15 fiscal.
Another long-delayed project, the Rs 3,000-crore deal for acquiring 197 "reconnaissance and surveillance" helicopters to replace the aging Cheetah/Chetak fleets of the IAF and Army, however, is headed for scrapping once again as a fallout of the VVIP helicopter scam, as reported earlier by TOI earlier.
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