Money requested for equipment modernisation slashed by 38 per cent
By Ajai Shukla
Business Standard, 9th Mar 21
Given the on-going 10 month-long confrontation with intruders from China’s People’s Liberation Army (PLA) in Ladakh, the military was hopeful in the run-up to the Budget that the government would meet its budgetary projections for the coming financial year (2021-22).
It came as a jolt on Budget day, therefore, when the three services were allocated only Rs 3,24,658 crore (Rs 3.24 trillion) – 28 per cent less than their budgetary projections of Rs 4,49,508 crore (Rs 4.49 trillion).
Making the blow even harsher, the services’ capital budget, which caters for the purchase of new equipment, was slashed by Rs 76,553 crore, a 38 per cent downsizing from the services’ projected requirement of Rs 1,99,553 crore (Rs 1.99 trillion). Instead, the army, navy and air force will have to make do in FY 2021-22 with Rs 1,23,000 crore (Rs 1.23 trillion).
Sources within the military reveal this is barely enough to cater for “committed liabilities”, which means instalments due this year on equipment purchases made in previous years.
On Monday, figures tabled in Parliament by the Ministry of Defence (MoD) revealed that this is hardly an exception. In all the preceding five Budgets, the military was allocated significantly smaller budgets than the requirement they projected in the run-up to the Budget.
Business Standard calculations, based on figures the MoD divulged on Monday, reveal that in FY 2017-18, the military received 28 per cent less than they had projected; in FY 2018-19 they got 30 per cent less; in FY 2019-20 the shortfall was 23 per cent, and in the current year it will be 28 per cent less.
Military budget: projections versus allocations
(Rs. in crore)
Year | BE | Money shortfall | Percentage shortfall | |
Projected | Allocated | |||
2014-15 | 2,84,079 | 2,10,403 | 73,676 | 26% |
2015-16 | 2,62,335 | 2,27,874 | 34,461 | 13% |
2016-17 | 2,69,242 | 2,33,552 | 35,690 | 13% |
2017-18 | 3,37,238 | 2,41,382 | 95,856 | 28% |
2018-19 | 3,68,786 | 2,58,887 | 1,09,899 | 30% |
2019-20 | 3,71,033 | 2,84,227 | 86,806 | 23% |
2020-21 | 4,03,219 | 3,01,116 | 1,02,103 | 25% |
2021-22 | 4,49,508 | 3,24,658 | 1,24,850 | 28% |
(Source: calculations based on figures tabled in Parliament)
Serving generals say this is worrying enough, but what really strikes at the military’s equipment profile is the even larger reduction in the capital expenditure budget.
Calculations based on the capex budget divulged on Monday reveal that in FY 2017-18, the three services received 41 per cent less than their capex projections; in FY 2018-19 they got 47 per cent less; in FY 2019-20 the shortfall was 41 per cent, and in the current year the military will have to bear a shortfall of 37 per cent.
Defence capital budget: projections versus allocations
(Rs. in crore)
Year | BE | Money shortfall | Percentage shortfall | |
Projected | Allocated | |||
2014-15 | 1,32,598 | 84,077 | 48,521 | 37% |
2015-16 | 1,04,399 | 86,032 | 18,367 | 18% |
2016-17 | 1,09,450 | 78,731 | 30,719 | 28% |
2017-18 | 1,33,126 | 78,124 | 55,002 | 41% |
2018-19 | 1,57,963 | 83,434 | 74,529 | 47% |
2019-20 | 1,56,776 | 92,015 | 64,761 | 41% |
2020-21 | 1,61,849 | 1,02,433 | 59,416 | 37% |
2021-22 | 1,99,553 | 1,23,000 | 76,553 | 38% |
(Source: calculations based on figures tabled in Parliament)
In its statement tabled in the Rajya Sabha on Monday, the MoD passed the buck to the Ministry of Finance (MoF). “It may be observed from the above tables that the allocations received from Ministry of Finance are not as per projections made,” stated the MoD.
“However, based on pace of expenditure (during the year), pending committed liabilities etc., additional funds are sought during the course of the financial year at appropriate stages. It is further submitted that, if necessary, re- prioritization is undertaken to ensure that urgent and critical capabilities are acquired without any compromise to operational preparedness of the defence services,” stated the MoD.
While it is true that the capex allocation for the current year was increased by over Rs 20,000 crore, that is an exception rather than the rule. Military sources point out that the mid-course capex increase was due to emergency purchases that were fast-tracked to deal with the PLA intrusions.
Military Covid-19 casualties
For the first time since the outbreak of the Covid-19 pandemic last March, the MoD tabled in Parliament figures divulging the military's Covid-19 casualties.
The army accounts for the most cases, totalling 32,690. The fatality rate amongst those is 0.24 per cent, which means 78 soldiers succumbed to the pandemic.
The IAF has recorded 6,554 Covid-19 cases, of which 25 airmen died, with a fatality rate of 0.39 per cent. The navy has had 3604 cases and accounts for the deaths of two sailors.
Covid-19 cases in the military
Service | Covid-19 positive cases | Fatality rate | Deaths due to Covid-19 |
Army | 32690 | 0.24% | 78 |
Navy | 3604 | 0.05% | 2 |
Air Force | 6554 | 0.39% | 25 |
(Source: calculations based on figures tabled in Parliament)
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