Poor Budget Allocation May End In Foreclosure Of 25 ‘Make In India’ Defence Projects: Army

| March 14 , 2018 , 14:18 IST

Vice Chief of Army Staff Lieutenant general Sarath Chand deposing to the Parliamentary Panel on Defence on Tuesday said that the allocation for defence in the Union Budget 2018-2019 had “dashed our hopes” of adequate modernisation of the force.

Lt Gen Chand added that the marginal increase in funds accounts only for inflation and may result in the foreclosure of 25 ‘Make in India’ Defence projects that are currently in the pipeline.

“The Budget 2018-19 has dashed our hopes and most of what has been achieved has actually received a little setback,” Chand said to the panel.

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“Allocation of Rs 21,388 crore foe modernisation is insufficient even to cater for committed payments of Rs 29.033 crore for 125 ongoing schemes, emergency procurement and other requirements,” Chand said.

He pointed out that the Armed Forces have "hardly any funds” for modernization in 2019,  despite 68 percent of the Army’s equipment being in the 'vintage' category and only 8 percent in the “state of the art” category.

“We have no choice but to leave out some priority acquisition cases. 63% of Army budget goes in to paying salaries, 14% for modernization. We need 20-25% of Army Budget for modernization,” Chand said.

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The parliamentary panel, in response to Chand, expressed alarm, saying that the allocation for services have to be suitably enhanced. Chand's statements come at a time when the armed forces are at a risk of a two-front war.

In the Union Budget 2018, for the Ministry of Defence an estimated Rs 2.95 lakh crores have been sanctioned, only an increase of 7.81 percent from last year's allocation. In addition, the defence budget's share of India’s Gross Domestic Product (GDP) is the lowest it has been since the 1962 war between India and China, working out to only 1.58 percent of India's GDP.

Considering that India is the biggest importer of arms in the world, the government has been pushing for indigenous arms development, which would possibly be hit by the poor budget allocations.