DEFENCE ISSUES
New Delhi, 13 March 2006
Defence Budget 2006
LACKS FUNDS FOR
MARTYRS
By Col. P.K. Vasudeva,
(Retd.)
The
modernisation programmes that have been kick-started by the armed forces are
set to continue, as the defence budget for 2006-07 has been hiked by 8.9 per
cent (Rs. 7,300 crore) to Rs. 89,000, as against Rs. 81,700 crore in 2005-06 on
expected lines. Finance Minister P Chidambram said while presenting the Budget
that this hike is meant to cater to “normal growth in pay allowances,
maintenance and for modernisation of the defence forces”. Now that the
borders with Pakistan
have been peaceful for two years, the
hike in the defence budget has been nominal.
Unlike
in the previous year, the three Services did not spend all the money, but
returned about Rs. 1,300 crore from the capital outlay. The capital
outlay for 2006-07 is Rs. 37,458 crore, up 13.25 per cent from the revised
expenditure of last year, and constitutes a little over 42 per cent of the total
defence budget. The increase of Rs. 4,383 crore in arms acquisition
funding implies that the Defence Ministry has a considerable sum in its hands
to place orders for new equipment and also meet the commitments for orders
placed by the previous and present governments.
This
will help the process of payments
both for the aircraft carrier that India
plans to build and the compliment of aircraft from Russia, submarines from France and advance jet trainers form Britain.
It will also help the Air Force call for international tenders to purchase 126
combat aircraft to shore up its depleting fighter squadron strength of MiG 21s and
enable the army to purchase upgraded 155mm artillery guns.
Despite
its failures to meet the deadlines on the main battle tank and indigenous aero
engines, the Defence Research and Development Organisation (DRDO) has been
given a 7.48 per cent hike in allocation to Rs. 3,020.18 crore, from last
year’s revised estimate of Rs. 2,809.96 crore.
The
allocation for the Army has been increased by 5.28 per cent to Rs. 33,205 crore
from last year’s revised estimates of Rs. 31,539 crore, while that of the Indian
Air Force has been hiked by 7.88 per cent to Rs. 10,087.36 crore from Rs.
737.09 crore in 2005-06. The Navy, the smallest of the three Services,
has got a hike of 5.75 per cent, as the allocation been increased to Rs. 6,791
crore, compared to last year’s estimate of Rs. 6,422 crore.
The
revenue expenditure has been increased by 6 per cent to Rs. 51,542 crore, from
Rs. 48,625 crore in 2005-06. This is in line with the Army’s demand that
the revenue outlay must not be downsized until the security situation stabilises
to acceptable levels.
While
Prime Minister Manmohan Singh recently said that the country’s defence budget
could be 3 per cent of GDP, the current budget is only 2.27 per cent of GDP,
despite an 8.9 per cent hike. India’s
neighbours, China and Pakistan,
allocate five to seven per cent of their GDP for their armed forces.
The
Government has also fulfilled the long-standing need of retired armed forces personnel
below officer rank for better pension benefits. About 12 lakh of these have
benefited to the tune of Rs. 460 crore with effect from January 1, 2006.
Having
remained on the periphery of the Centre’s priorities in the 1990s, the defence
sector came into the limelight after the 1999 Kargil conflict. Moreover,
nearly two years of full mobilisation on the border showed that the armed
forces were under-prepared for a modern war. The US-led military
operations after 9/11 also contributed to increasing expenditure on military
platforms and surveillance mechanisms.
Despite
the tranquil borders and a relatively stable situation in Jammu and Kashmir, P. Chidambaram has made reasonably substantial
allocations for the defence sector. The revenue expenditure has been
increased to 6 per cent because the Army will be averse to downsising until the
security situation stabilises to its satisfaction.
On
the capital expenditure side, the armed forces had made out a case for increasing
the outlay from the current year’s Rs. 34,375 crore. Hence it has been
increased by 13.25 per cent. This is to meet the commitments for orders
placed by the present and previous Governments and signed contracts for more
equipment, primarily for the Army and the Navy.
The
funds allocated will help for purchasing more military hardware. The
Defence Ministry is in the process
of purchasing a complement of surveillance planes for the Navy and a large
number of tanks from Russia to replace
its ageing Armoured Corps assets,
besides air defence equipment. The Navy is also planning to repeat an
order for three warships from Russia. It is
keen on strengthening its nuclear force levels.
Talks
with Russia
are highly confidential, but according to information, India is discussing the acquisition of long-range bomber planes
and nuclear submarines. However, there is no timeframe for completing the
negotiations. In view of the complexity of such deals there was no requirement
for Chidambaram to make allowance for these capital-intensive nuclear delivery
systems.
While
India
continues with high-end military purchases, industry is hoping to benefit from
the spin-offs. The Government has announced that foreign companies
supplying equipment worth over Rs. 300 crore would have to source one-third of
the value of the contract from the country. The Defence Ministry is on
the verge of finalizing this offset policy. However, a question mark
hangs over the policy because of pressure by foreign companies to modify some
clauses to their advantage.
While
big military purchases and the huge expenditure on salaries and pensions for
the armed forces are the two major components of the defence budget, the Army
hoped for a little more generosity from the Finance Minister to adequately
compensate soldiers who died in action. The Defence Ministry had sent a
proposal for higher compensation to its martyrs. This is unfortunate as the Finance
Minister could not find funds for this noble cause. This is one of the
reasons that the armed forces are not attracting sufficient number of quality youth
of the country.
As
a former Finance Minister, Pranab Mukherjee realises the constraints imposed by
social sector commitments on the exchequer. This is why he has refrained
from pressing
for what the Prime Minister had assured:
three per cent of the gross domestic
product to the defence sector if the economy continued to grow at a healthy
rate. This long nurtured expectation of the armed forces, supported by
strategic analysts, unfortunately has not materialised.---INFA
(Copyright, India News and Feature Alliance)
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