NEW DELHI: There is a growing disparity between the monetary allocation that the armed forces seek for modernisation and what they eventually get in the Union budget.

Latest figures show that the gap is so wide that what the government allotted for 2021-22 under the Capital budget, was lower than the allocation that the forces had sought seven years ago in 2014-15.

This gap in what the forces project under capital expenditure and what is eventually allotted by the finance ministry has led to multiple projects getting delayed because of a cash crunch and a majority of the modernisation funds going into committed liabilities.

According to data provided in the Rajya Sabha in a written reply Monday, the armed forces had projected a need for Rs 1,32,597.69 crore in the 2014-15 fiscal for modernisation plans. The government, however, allotted just Rs 84,076.95 crore in that year’s budget.

This bill by the armed forces had risen to Rs 1,99,553.44 crore under the capital budget in this year’s budget demand. The government, however, eventually allotted Rs 1,23,000.22 crore, an amount less than what the Services had sought in 2014.

This works out to be roughly a 38 per cent downsizing from the Services’ demand as part of its modernisation plans, which comes at a time when tensions with China is at an all time high since the 1962 war.

Experts point out that the capital budget does not mean funds only for acquisition but also includes money for land and certain construction activities.

For example, in the 2020-21 budget, while the capital budget under the budgetary estimate was Rs 1,02,432.57 crore, only Rs 89,698 crore was meant for modernisation, according to Laxman Kumar Behera, associate professor at Jawaharlal Nehru University’s Special Centre for National Security Studies.

Behera said the budget deficit is not unique to the Narendra Modi government but added that the gap has become more acute in recent years because of which less money is available for new contracts as the majority of funds go into committed liabilities.

Committed liabilities is a term for payments that need to be made according to the schedule for contracts inked in the past.

Forces Face The Cash Crunch

Sources in the defence and security establishment said that the highest deficit has been felt by the Navy, which had projected a requirement of Rs 70,920.78 crore for the 2021-22 fiscal.

Against this, the Navy has been allotted a mere Rs 33,253.55 crore, less than half of what it had sought. This comes at a time when the Navy has planned a few big projects, including for new submarines, minesweepers besides unmanned aerial systems, and new warships among others.

The Army, which has been at the forefront of the tensions with China, had projected a need for Rs 51,492 crore for its modernisation budget, but eventually got Rs 36,531 crore this fiscal.

The Air Force has got just Rs 53,214.77 crore as against a projection of Rs 77,100 crore. This comes at a time when the IAF is looking at acquiring new fighters, missiles and unmanned aerial systems besides refuelers and Airborne Early Warning and Control (AEW&C ).

Defence Budget Up But Share In Capital Outlay Down

According to PRS India’s Legislative research, the defence budget has grown at an annual average rate of 8.4 per cent, while total government expenditure has grown at 10.3 per cent in the last decade (2011-12 to 2021-22).

The report also highlighted that over the last 10 years, the share of the defence budget spent on capital outlay has declined. The share spent on capital outlay was highest during 2011-12 at 30 per cent of the total defence budget, which fell to 22 per cent in 2018-19 (the lowest), and recovered to 27 per cent (in 2020-21).

According to the PRS paper, the committed liabilities in 2016-17 was Rs 73,553 crore and budget allocation was Rs 62,619 crore, a shortfall of 15 per cent.

This shortfall increased to 29 per cent in 2019-20, as the committed liabilities was Rs 1,13, 667 crore while the budget allocation was just Rs 80,959 crore.