With challenges on two fronts, all eyes on Defence Budget – -BUDGET 2021: The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/defence/with-challenges-on-two-fronts-all-eyes-on-defence-budget/articleshow/80617731.cmsSynopsis

In 2020, the defence ministry was allocated Rs 4.71 lakh crore but a significant part of this (Rs 1.3 lakh crore) went to just pensions. The budget was highly skewed in terms of revenue and capital allocations, especially for the army. Over 82% of the army’s budget was under the revenue head, leaving little for modernisation and capital expenses.

New Delhi: With a clear two-front challenge manifesting itself on the ground, all eyes are on how much resources finance minister Nirmala Sitharaman will be able to allocate to the defence forces.

There is an expectation for a significant increase in the allocations, given the added strain of deployments in the Ladakh and other parts of eastern borders, and a build-up of urgent procurements that have not gone through in the last three years due to limited allocations.

The year gone by also brought massive operational challenges that led to large-scale emergency purchases of things ranging from ammunition to winter weather clothing and small arms. The forces are believed to have spent more than Rs 10,000 crore for the emergency procurements and have moved plans to enhance the 2020-2021 allocations at the RE stage.

“In 2020, the ministry got Rs 4.71L cro but a big part of it (Rs 1.3L cr) went for just pensions”

— Big Pension Spend
In 2020, the defence ministry was allocated Rs 4.71 lakh crore but a significant part of this (Rs 1.3 lakh crore) went to just pensions. The budget was highly skewed in terms of revenue and capital allocations, especially for the army. Over 82% of the army’s budget was under the revenue head, leaving little for modernisation and capital expenses.

The army’s revenue expenses are expected to go up significantly, given the large deployment of troops in Ladakh, which had swelled to 50,000 in November. Beyond Ladakh, the army has moved ahead assets all along the Line of Actual Control (LAC) to counter Chinese moves.

The Line of Control (LoC) with Pakistan also remains fully manned, with terrorists testing alertness and deployment levels with constant attempts to infiltrate. The armed forces have also projected requirements to meet new challenges, including loitering munitions, unmanned aerial vehicles for surveillance and modern small arms, all of which will require additional resources.

China, which already has an advantage over India in terms of military hardware, has been investing heavily in its armed forces. China’s annual defence spending – unofficial and concealed – is pegged at around $261 billion, while India’s is approximately $71 billion, according to Stockholm International Peace Research Institute (SIPRI) Yearbook 2019.

According to defence ministry projections, there has been a consistent 25% shortfall between budget allocations and forces projections.

The total projection for both capital and revenue expenditure in 2017-20, according to the defence ministry’s calculations, was a little over Rs 13.4 lakh crore. What it has actually got was about Rs 8.39 lakh crore, with an approximate shortfall of Rs 5 lakh crore.

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