Indian Army is on new venture…Army plans to utilize budget judiciously to meet critical requirements

Army plans to utilise budget judiciously to meet critical requirements. Faced with a deficiency in ammunition, the Indian Army is working on a proposal to utilise its budget in a judicious way to meet its critical requirements, government officials said.

The plan is to spend less on certain types of ammunition, such as a particular missile and spares for vintage vehicles, and instead use that money on buying new equipment and procurement for making up the ammunition level for 10 (I), or 10 days of intense war.

The army believes these measures will not only save a few thousand crores, but also help substantially meet its requirement of ammunition for the next three years. But the situation is grave, because there will still be a requirement of additional funds to make up for the deficiency, the officials said.

In addition, due to contracted liabilities (payments anticipated during a financial year for contracts concluded the previous years) and emergency procurement of ammunition and spares, there will be a need for prioritising procurements based on the budget available.

“For making up the levels of ammunition and spares, emergency procurement and 10 (I) procurement have been undertaken. But, no additional funds have been given for them,” an official said.

This issue is likely to be discussed at the Army Commanders’ Conference on Monday. A key agenda for the conference is the “optimisation of limited budget to ensure making up of critical deficiency in ammunition”, the army said.

The defence budget of India-the world’s largest arms importer has more than doubled over the past decade from Rs 80,500 crore to Rs 229,000 crore for the financial year 2014-15.Yet, the defence forces are critically short of arms, and men and women at arms.The army, navy and air force are short of officers by 17% (7,989), 17% (1,499) and 3% (357) respectively, according to latest data tabled in the Lok Sabha. Consider the arms deficits in the three services:

–The Indian Air Force (IAF) is short of 272-306 fighter aircraft (as this IndiaSpend report explains) and 56 medium transport aircraft.

–The Indian Army needs about 3,000 to 3,600 artillery guns, 66,0000 assault rifles, 2 lakh pairs of ankle leather boots and 66,000 rounds of armour-piercing ammunition for T-90 tanks.

–The navy needs 12 diesel-electric submarines, 6 nuclear attack submarines and 7 stealth frigates.

The three defence wings also collectively need more than 1,000 helicopters. This is an indicative list: The actual list of defence requirements and shortages is longer.

Yet, the Ministry of Defence accounts for the second-highest share of India’s budget, after the finance ministry.
The defence budget accounts for 1.78% of India’s Gross Domestic Product (GDP) and 12.76% of total central government expenditure, said Amit Cowshish, distinguished fellow at Institute for Defence Studies and Analyses (IDSA).

The revenue to capital ratio of the defence budget is 60:40. Revenue expenditure is for payment of salaries and maintenance of defence bases and equipment. Capital expenditure is for equipment purchases and modernisation. India is expected to spend Rs 94,587.95 crore in the coming years as capital expenditure, a 20% increase from Rs 78,872.23 crore.

“The requirement of funds (for defence purchases) is directly related to carried-forward committed liabilities and signing of new contracts,” Cowshish said in an email interview with IndiaSpend. As a result, the forces could expect a similar increase in the 2015-16 budget “if- and this now seems to be a big if new projects, such as the one for a new combat aircraft, go through”.

Source: Economic Times