India's defence budget likely to have no major changes

Tuesday, 25 February 2003, 08:00 Hrs
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NEW DELHI: India's budget for the next fiscal is unlikely to see major changes in allocations for the armed forces, with experts expecting the government to persist with moves to provide adequate funds for modernising the military arsenal.

The military experts are, however, critical of the finance ministry's perceived failure to formulate a policy for funding the purchase of major weapons systems, the negotiations for which can be spread over several years and cannot be covered by the budget allocation for a single fiscal year.

India allocated 650 billion as the outlay for defence spending in the current year, with almost a third of the amount set aside for "capital expenditure" or the purchase of new weapons and military hardware.

The country's defence spending has grown steadily since Prime Minister Atal Bihari Vajpayee's Bharatiya Janata Party came to power in 1998 promising to beef up the security apparatus to meet external and internal threats.

But as several major deals -- including the purchase of 66 advanced jet trainers from Britain and a refurbished Russian aircraft carrier -- have not fructified despite protracted negotiations, over 50 billion could be surrendered as unspent funds by the defence ministry in this fiscal.

The defence ministry had surrendered over 50 billion in a similar manner during fiscal 2001-02, earning the ire of the armed forces top brass and defence experts.

"The Indian government's defence allocation for budget has never catered for several key parameters -- the current threat perceptions, the position India seeks for itself in the Asian region and achieving self-reliance in indigenous production," said Bharat Verma, editor
of Indian Defence Review, a leading defence publication.

"There has to be a consistency in defence budgets for a period of at least five years, with carrying over of funds that are allocated for capital expenditure," he said.

India's defence spending is currently pegged at about 2.6 percent of GDP, lower than the target of three percent recommended by military planners and experts.

Experts say the allocation for the next fiscal will be on similar lines.

"The finance ministry has indicated that there should be no defence spending till March 31, and the unspent funds should be surrendered to reflect a lower fiscal deficit," said Commodore (retired) Ranjit B. Rai, a leading defence analyst and writer.

"Therefore, major deals like the purchase of the advanced jet trainers, the Admiral Gorshkov aircraft carrier from Russia and Scorpene submarines from France are likely to be cleared only next year," he said.

Rai said he believed that the defence and finance ministries would also take steps to cut "revenue expenditure," or spending on salaries, allowances and pensions that account for almost two-thirds of the defence budget.

"There will be some financial jugglery and modification of pension schemes to cut expenditure."

A military official who spoke on the customary condition of anonymity said there was considerable heartburn within the armed forces at being left out of the loop on deciding on major purchases.

"After powers were delegated for minor purchases, the armed forces took care of all problems related to spares for equipment, which had been a chronic problem. Now there are no shortages," he said.

"But the armed forces have no say in major arms deals. The technical and other negotiations on the Admiral Gorshkov and the jet trainers were completed several years ago, but there has been no movement on the part of the government."

Source: IANS
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