Defence Notes
New Delhi, 20 January 2015
Army Modernisation
PLAN HIT AS BUDGET
CUT
By Dr PK Vasudeva
Modernisation of the Indian Defence Forces is a continuous
process based on threat perception, operational challenges, technological
changes and available sources. The process is based on a 15-Year Long Term
Integrated Perspective Plan (LTIPP), Five Year Services Capital Acquisition
Plan (SCAP) and an Annual Acquisition Plan (AAP). Procurement of equipment and
weapon systems is carried out as per the AAP in accordance with the Defence procurement
procedure. The Defence Acquisition Council (DAC) has cleared a total of 41
proposals since June last year. This was stated by Defence Minister Manohar
Parrikar in a written statement in Rajya Sabha, during the winter session of
Parliament.
Unfortunately, the Army’s plan to modernise its arsenal with
the latest weaponry has taken a beating as the Finance Ministry has recently
cut the budget by almost about Rs 5,000 crore, leaving that much less money to
make fresh purchases.
Army Chief Gen Dalbir Singh had on 13 January stated that the
Army identified seven critical projects, which would be pursued for equipping
the soldiers with advanced firepower and mobility. These critical projects
which the Army chief outlined are 814 artillery guns, 8000 third generation
antitank missiles (from Israel), acquiring 197 helicopters for the Army,
upgrading of tanks and BMP armoured vehicles, procurement of assault rifles,
bullet proof jackets and helmets for the infantry soldiers and night vision
devices for the infantry mechanised forces.
Out of these two projects, 814 artillery guns at a cost of
Rs 15,750 crore and more than 8,000 third generation anti-tank missiles (from
Israel) at a cost of Rs 3,700 crore were approved by the Defence Acquisition
Council (DAC) headed by Defence Minister Parrikar. However, other five crucial
projects are still under consideration of the Ministry of Defence (MoD). Both
would have to be cleared by the Cabinet Committee on Security (CCS) before the
procurement process starts because any project with more than Rs 1,000 crore
budget needs CCS approval.
Since 2009-10, the Army’s capital budget is on a continuous
decline hitting the lowest point in 2013-14 when the capital budget was only 18
per cent of the total allocation. This was spent mostly on the “committed
liabilities” or existing purchases.
For 2014-15, the Army's additional demand (for grants) was
not met but capital budget, meant for acquisition was reduced by about Rs 5,000
crore apparently because the money was transferred to revenue heads used for
paying salary, pension and fuel bill. Other two services are also likely to
have suffered from the budget cut and the modernization is likely to be delayed
further, which will have adverse effect for the defence forces as well as for national
security.
One of the reasons behind enhancement of revenue budget is
the BJP-ruled NDA government’s plan to implement one-rank-one-pension (OROP)
plan for ex-servicemen which is pending for the past three decades. The Government
accepted the OROP in principle and modalities of implementation are being
worked out. Last month, Parrikar said OROP, which was announced in the last Union
Budget, would be implemented before the next Budget.
India cleared a bulk of defence projects
worth $13 billion in a bid to boost the country's national defence
preparedness, the Indian DAC said on 25 October 2014. The Council decided that
six submarines will be made indigenously at a cost of about Rs 50,000 crore. It also decided to purchase 8,356 Israeli
anti-tank guided missiles at a cost of Rs 3,200 crore for the Indian Army.
The council finalised purchase of 12 upgraded Dornier
surveillance aircraft with improved sensors from Hindustan Aeronautics Limited (HAL)
at a cost of Rs 1,850 crore. The DAC also decided to buy 362 infantry
mechanised vehicles at a cost of Rs 662 crore. The decision to manufacture the
submarines in the country is in line with Prime Minister Narendra Modi's ‘Make
in India’
pitch.
The Indian defence budget stood at US $11.8 billion in 2001.
On February 17, 2014 the then Finance Minister P. Chidambaram announced a 10
per cent increase in India's
defence budget, taking it to $36.3 billion. In March 2014 China announced
a 12.2 per cent increase in its defence budget, raising military spending to
$132 billion.
It may be noted that as per Pentagon’s annual report to the
US Congress, India’s annual
defence budget is just one-third of that of China despite the tensions that
remain along their shared border. The official annual defence budget of China in 2013 was $119.5 billion against India's $39.2
billion.
India announced plans to boost defence
spending in 2014-15 by 12 per cent over the previous year, and further opened
the domestic weapons industry to foreign investment. The Modi government had
long called for a militarily strong India
to counter potential threats from both its neighbours-- China and Pakistan. In July 2014 the new
Indian military budget was set at Rs 2.29 trillion ($38.35 billion) for
2014-15, and the foreign investment limit in the domestic defence industry was
raised from 26 per cent to 49 per cent.
Arun Jaitley, who was both the Defence Minister and Finance
Minister in the new BJP government, presented the budget for the year 2014-15
on July 10, 2014. He stated: “There can be no compromise with the defence of
our country. I therefore propose to allocate an amount of Rs 2,29,000 crore for
the current financial year for Defence. ... Modernization of the armed forces
is critical to enable them to play their role effectively in the Defence of
India’s strategic interests. I, therefore, propose to increase the capital
outlay for Defence by 5,000 crore over the amount provided for in the interim
Budget. This includes a sum of Rs 1,000 crore for accelerating the development
of the Railway system in the border areas. Urgent steps would also be taken to
streamline the procurement process to make it speedy and more efficient.”
Defence expenditure, which was 2.24 per cent of the GDP in
1997-98, has come down to 1.79 per cent of GDP in 2014-15 and this gradual decline
is against the modernization of defence forces. Hopefully, the next budget will
be around 3 per cent of the GDP keeping in view the long-pending demand of
defence modernization and threat perception from adversaries China and Pakistan. ---INFA
(Copyright,
India News and Feature Alliance)
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