Union Budget: Defence forces have to belay their modernisation plans due to cash crunch

Notably, majority of the funds allocated to the defence forces last year were spent on pension and salaries. Of the total Budget allocation, Rs 2.10 lakh was set aside for paying salaries

In her last Budget Speech, Finance Minister Nirmala Sitharaman had emphasised on immediate need for modernisation and upgradation of defence forces. However, the total defence allocation was Rs 3.18 lakh crore, or a mere 1.6 per cent of the GDP, lowest since the 1962 India-China war. In the face of rising threats from neighbouring countries, defence forces are expecting the Finance Minister to allocate more funds this year in Union Budget 2020.

In the last Budget, Rs 1.08 lakh crore out of the total allocation was set aside for capital outlay to purchase new weapons, platforms and military hardware. Under capital outlay, the Army was granted Rs 29,447 crore, the Navy was given Rs 23,156 crore and the Indian Air Force got an allocation of Rs 39,302 crore.

Notably, majority of the funds allocated to the defence forces were spent on pension and salaries. Of the total Budget allocation, Rs 2.10 lakh was set aside for paying salaries. The defence allocation of Rs 3.18 lakh crore in the last Budget did not include Rs 1.12 lakh crore set aside for paying pensions.

The defence forces expect FM Sitharaman to increase the capital outlay for upgrading their equipment, armoury and fleets. The government has outlined plans to introduce new weapons and equipment in all three wings of defence forces. These include new assault rifles and bullet-proof vests for Indian Army; Rafale fighter jets, Tejas light combat aircraft, and airborne early warning and control (AEW&C) systems for the Indian Air Force; and new submarines and warships for the Indian Navy.

There are chances this might not come to pass, though. Reports suggest that the government spending on defence is unlikely to change, and judicious selection of fields to spend on will be crucial. This holds significance as trends show defence pensions progressively rising every year.

India has not been spending much on defence research either. Defence Research and Development Organisation (DRDO) has been receiving a meagre part of the total defence allocation. Last year, only Rs 19,021 crore was allotted to the defence R&D body out of a total defence allocation of Rs 3.18 crore.

Moreover, Finance Minister Sitharaman might announce measures to boost defence manufacturing in India under the Make in India initiative.