The current government has first to clear the backlog of the previous government’s pending decisions and make fresh acquisition plans to augment India’s combat capability to take care of India’s strategic interests.

Perhaps financial constraints did not permit the Narendra Modi-led NDA Government to substantially increase the provisions for the defence budget for the financial year 2014-15. The increase for Rs. 5,000 crore ($835 million) for the capital outlay, which included for the first time a fund of Rs. 1,000 crore for railway infrastructure development on border areas, was only a symbolic one. The defence budget hence was pegged at Rs. 2,29,000 crore ($38.5 billion) which was 12. 43 per cent higher than the previous financial year of Rs. 2,03,672 crore. The UPA Government in February this year had presented an interim defence budget of Rs. 2,24,000 crore.

Since, the government has to take immediate decisions on the acquisitions of many weapon systems worth over $ 25 billion in this financial year, strategic observers were waiting to see a big jump in the allocation for defence. However, lack of money does not mean lack of will and should not prevent the government from giving the go ahead for some of the major deals like the 126 MMRCA for the Indian Air Force (IAF), worth around $15-20 billion. The Boeing heavy-lift helicopter Chinook and the attack helicopter Apache are also waiting clearance before the Prime Minister Narendra Modi embarks on a historic trip to White House. There are other major weapon systems and platforms like the Howitzer guns, Javeline missiles, air refuellers, soldier modernisation project, etc, which are also urgently waiting government’s attention. The previous government simply could not gather enough courage to okay these big-ticket deals. This sorry state of affairs cannot continue for long and the new Modi Government has to be seen to be governing and taking decisions in right ernest.

Over the years the government has run into the habit of not spending the entire sum allocated under the capital outlay, hence the Ministry of Defence under A.K. Antony had to return an hefty amount of Rs. 7,868.48 crore in 2013-14 budget. Originally the provision for capital outlay for acquisitions in defence budget was pegged at Rs. 86,740.71 crore which was reduced to Rs. 78,872 crore in the revised estimate for 2013-14 financial year. Now, in the next financial year 2014-15, the government has fixed Rs. 94,587 crore for capital acquisitions.

In this light, the Arun Jailtey budget does not evoke much confidence. Commenting on the budget Air Commodore (Retd) Prashant Dixit said, “The additional allocation of Rs. 5,000 crore on capital expenditure does not seem compatible unless we recognise that earlier funds earmarked for capital acquisitions either remained unused or were diverted to other expenditures as austerity measures . This problem will not vanish unless the government gears up speedily but judiciously and does not buckle under other compulsions.” The three services have been allotted $16 billion for defence capital expenditures, which has been divided under various categories. Under the aircraft and aeroengine segment the IAF has been allocated $2.75 billion.

Though defence pensions have been kept out of the actual allocation budget for the three services, the government was perhaps constrained by the rising expenditures on account of pensions, which will go up substantially with the NDA commitment for One rank One pension scheme. This has forced the government to hike the provision for defence pensions from Rs. 45,500 crore in the last financial year (2013-14) to Rs. 51,000 crore in the 2014-15 financial year. If we add the government expenditure on account of pensions the Indian Government total spend on defence would be substantially higher, however, probably to give a different angle to defence budget, the government has separated the two.

However, what is most relevant for defence watchers is the provision for capital outlay for the three services. Out of the total budgetary provision of Rs. 2,29,000 crore ($38.5 billion) the capital outlay of Rs. 94,587 crore ($14.75 billion) is said to be very modest. This expenditures includes the provison of Rs. 21,730 crore for the three services on aircraft and aero-engines, which in fact is much less than the provison for the last financial year which was Rs. 37,189 crore. Under this head the Air Force will get the maximum of Rs. 16,271 crore while the Navy would be getting Rs. 3,330 crore and the Army Rs. 2,127 crore.

For the Army to acquire heavy and medium vehicles the provision has been substantially increased which is Rs. 2,692 crore this year whereas last year this was Rs. 1,480 crore. In the category of other equipment, which does not mention any particular class of weapon system, the budget has made a provison of Rs. 35,302 crore which is almost double than last year’s provision of Rs. 17,795 crore. Probably other equipment incorporates systems like the ballistic missiles and other latest weaponry and platforms. For the Air Force to meet the running expenditures a provision of Rs. 20,504 crore has been made, while Army has got Rs. 92,669 crore and the Navy only Rs. 13,975 crore.

Jaitley has revisited the special provison of Rs. 100 crore made in 2011 defence budget but not executed on ground for setting up a technology development fund. The government has also for the first time introduced a new element of socio-economic development of villages on the border areas, which are considered to be first line of defence and India’s eyes and ears on the borders. A special fund of Rs. 990 crore has been earmarked, whereas another first time provision of Rs. 150 crore for the marine police stations, jetties and purchase of police boats is significant. The decision to erect a war memorial and a museum at a cost of Rs. 100 crore will also be taken note of by the defence community.

One can certainly excuse the present Modi Government for not being very generous in funds allocation for defence, because the government has inherited a very poor state of economy and four months have already passed from the current financial year. However, with the rising security challenges in India’s neighbourhood and in the vicinity of Indian maritime area, the government cannot afford to be complacent. The current government has first to clear the backlog of the previous government’s pending decisions and make fresh acquisition plans to augment India’s combat capability to take care of India’s strategic interests.