Forces battle new enemy in financial crisis

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SummaryIndia’s hard-pressed forces now have to battle a new enemy — the global economic crisis. The defence ministry on Wednesday said there will be no major hike in its next budget due to the financial meltdown.

India’s hard-pressed forces now have to battle a new enemy — the global economic crisis. The defence ministry on Wednesday said there will be no major hike in its next budget due to the financial meltdown. “We are passing through a difficult phase, the recession is affecting us. There will be a cut in the capital and revenue budget. However, we will not cut the expenditure on operational preparedness,” defence minister AK Antony told reporters at Aero India 2013.

“India being one of the world's biggest spenders on defence equipment will be slashing defence imports in the coming fiscal year and increase the focus more on indigenization of weapons,” he added.

Delhi has earmarked $36.35 billion for defence spending for the current fiscal. Of this, R79,579 crore will be spent on buying new weapons.

As reported by FE, with the defence capital acquisitions budget being slashed by around R10,870 crore, several critical procurement projects have come to a halt. They range from acquisition of submarines and howitzers to missiles and helicopters.

The two biggest projects facing huge delays are the over $10 billion one for six new-generation conventional submarines and the almost $10.4 billion 126 MMRCA (medium multi-role combat aircraft) project.

The submarine proposal, dubbed Project-75 India, has been in the making for several years now. But the MoD is yet to even issue the global tender or RfP (request for proposal) to kick off the formal process. The inking of the contract for the massive MMRCA project itself has been put off till the next fiscal due to the budget cut. The finance ministry had recently told the defence ministry that there would be a cut of around R10,000 plus crore in the R1.93 lakh crore allocated for the defence sector, ministry officials said in New Delhi.

According to the defence minister, “the acquisitions will be prioritized. There will be no compromise on security of the nation. We might push back in certain areas”.

Earlier in the morning, kicking off Asia’s biggest aerospace exposition, Antony said the focus of the country is achieving self-reliance in the defence sector.

Under the R1.93-lakh crore budget allotted, R1,13,829 crore is for revenue expenditure, including salaries and pensions, and R79,579 crore was for modernising the armed forces by acquiring new assets. “Self-reliance in defence area is our focus area,” he said.

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