In the backdrop of the tension along the Line of Control with Pakistan, the defence ministry has protested to the finance ministry on the Rs 10, 000 crore budget cut and has sought exemption from the austerity measures.
According to sources, “ In view of the recent tension along the Line of Control, the defence ministry officials have been meeting with the finance ministry and have requested that these funds released so that the planned acquisition can go on.”
The funds were cut contrary to defence minister AK Antony’s promise of getting more funds for the armed forces modernization plans.
However, sources revealed that the budget was cut by the finance ministry who informed the armed forces earlier this month that the step was taken as fiscal adjustment was necessary due to the current economic situation in the country.
In May 2012, Antony, during discussion on defence preparedness in Parliament, had declared he would seek a hike in the Rs 1,93,408 crore defence outlay in the 2012-13 budget due to new ground realities and the changing security scenario.
The budget cut put virtually a lot of major defence programmes on hold including the ongoing acquisition plans from aircraft and helicopters to howitzers and missiles. This cut also meant that the `mother of all deals’ the $ 10.4 bn medium multi-role combat aircraft (MMRCA) deal to acquire 126 fighters will not be inked anytime before March 31.
After the French `Rafale’ fighters were short listed for the MMRCA, the defence ministry had promised to release Rs 10,000 crore towards the first installment, if the deal is to be inked this fiscal.
In view of the cost-cutting measures, defence forces have been asked by the ministry to concentrate on prioritising their procurements.
According to sources, defence ministry does not get the money that it demands every year, for instance armed forces, had sought a defence outlay of Rs 2,39,123 crore this fiscal that would have amounted to 2.35% of the projected GDP for 2012-13,but got only Rs 1,93,408 crore.
The revenue expenditure this includes the salaries etc of the armed personnel, each year continues to outstrip the capital outlay for the modernization programmes.