In her inaugural speech at the daylong national seminar on Defence Budget at the Institute of Defence Studies and Analysis (IDSA), HK Pannu said, the three services, in fact, have been unable to spend the money earmarked for purchases or capital expenditure.
Denying funds shortage, she said it was a myth that current outlays on defence were not sufficient.
Though outlay on capital expenditure in the budget has gone up from less than 30% in 1989-90 to a little over 45% in the current financial year, a major chunk of this has remained unutilised.
A study shows that the share of the Indian Air Force, during the period, has risen from 34.3% to just over 40% of the total capital expenditure, mainly on account of some recent big ticket purchases.
In the last eight years, the services have been unable to spend between Rs1,490 crore to Rs 6,500 crore, amounting to 4-31% of total budgeted capital expenditure, said IDSA scholar Laxman Kumar Behera.
CAG, in its report for 2005-06, cites delay in approval of plans and qualitative requirements, plethora of agencies involved, improper vendor identification and lack of objectivity and fairplay in technical evaluation for the bottlenecks in the long-drawn out acquisition process.
In 2007 India continued to be among the top ten military spenders in the world with a budget of $24.2 billion but in the last two decades the share of defence budget has shrunk from 2.96% of the countrys GDP in 1989-90 to 1.99% in 2008-09.
Pannu said Indias defence spending, in real terms, is much lower than reflected in the defence budget. She proposed that it was high time funds for organizations and schemes like the NCC, ex-servicemen welfare and Sadbhavana programme be taken out of the defence allocation.
This would give an impetus to reforms in the colossal defence budgeting and help better plan social sector and welfare schemes.
The country still spends just a tenth of the money on health than it spends on defence, she noted.