The slowing cash flow has hit the forces modernisation plans hard.
A delay in Indigenous Aircraft Carrier (IAC), the slow progress of border roads projects in Arunachal, the extremely poor progress of ordinance factories and defence PSUs are said to be among the top reasons for the current bottleneck in the defence expenditure, sources said.
In an attempt to use the R1,93,000 crore alloted as defence budget, out which around R80,000 crore is for modernisation and acquisition projects, defence minister AK Antony has asked the army, navy and the air force to conduct a series of review meetings about the projects having direct linkages with the operational preparedness.
The budget estimates were given to the finance ministry in accordance with the assessment of the new emerging threat perception from neighbouring countries. However, with other ministries facing cuts, the defence ministry is afraid that its inability to use up the defence budget would lead to a cut in the next budget,a source told FE.
The MoD, in the current fiscal, is expected to sign the final contract for the procurement of 126 MMRCA at an estimated value of R48,000 crore along with multi-billion dollar tenders for artillery, helicopters and warships.
Unfortunately, the ever-complex and slow acquisition process has not only delayed some major purchases but also forced the ministry to re-issue various tenders.
The defence minister had asked for an additional R40,000 crore for modernisation plans. Antony said he was struggling to get even the R1.93 lakh crore allotted by the government. Now I am struggling to get the budgetary amount, he said in response to a question if he was hopeful of getting an additional R40,000 crore sought by his ministry for modernising the services. Compared with last years defence budget of R1.70 lakh crore in 2011-12, the budget this year for the armed forces was 13.15% higher at R1.93 lakh crore, out of which R79, 579 crore was to be spent for the purchase of new weapons and platforms.