Defence

Budget for defence forces in 2019-’20 not enough even for their committed payments

By indsamachar

Posted on 12/02/2019

The money allocated to the Navy and the Air Force in the interim Budget are not enough to even fund the payments the forces have already committed to make in 2019-’20, The Hindu reported on Monday. The shortfall has left defence staff concerned about capability enhancement and modernisation efforts, the newspaper said.

The Budget, presented in Parliament on February 1, had allocated Rs 3.01 lakh crore to the three defence forces – including Rs 1.03 lakh crore for capital expenses.

“The Services have conveyed their concerns to the defence ministry,” an unidentified ministry official told The Hindu. “Defence Minister Nirmala Sitharaman is taking up the matter with the Finance Ministry to address it.”

“Either we are allocated more funds later in the year, or we need to cut down on expenditure elsewhere if we have to meet all liabilities that we have agreed on,” an unidentified senior naval officer told the Hindustan Times.

The Indian Navy has been allocated Rs 22,227 crore for capital expenditure, but its committed liabilities in 2019-’20 is Rs 25,461 crore. The Air Force has committed to paying Rs 47,413 crore this year, but has been allocated Rs 39,347 crore. The commitments include the payments for Rafale fighter jets from France.

The Army’s capital allocations will, however, be enough to fund its committed liabilities – it has got Rs 29,700 crore and has to pay Rs 21,600 crore. But it is expected to fall short on its non-salary revenue expenditure. The total projected expenditure is even larger – Rs 36,000 crore for the Army, Rs 35,714 crore for the Navy and Rs 74,895 crore for the Air Force.

An official of the defence ministry told Hindustan Times that the forces also have the option to roll over the liabilities.

Amit Cowshish, a former chief financial adviser to the ministry, told the newspaper that “rolling over committed liabilities happens, but is not a healthy practice”.

“Importantly, it reflects poorly on the country,” he said. “It is a very difficult position to be in. Not providing for committed liabilities didn’t happen in the past. Importantly, allocation of extra funds is unlikely to go up later in the year.”