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Military faces spending cuts

New Delhi, Nov. 7: Defence minister A.K. Antony today signalled possible cuts in military expenses and asked the armed forces and their supporting agencies to “be more focused in spending”, a ministry official said.

The signal contrasts sharply with a proposal that was being considered by the defence establishment in July to ask the finance ministry for an additional allocation of about Rs 45,000 crore.

The total allocation for defence in the current year is Rs 1,93,408 crore.

The proposal to seek additional funds arose after former army chief Gen. (retired) V.K. Singh wrote to Prime Minister Manmohan Singh citing “critical hollowness” in the military arsenal.

Three months on, the ministry has assessed that the armed forces and agencies such as the Ordnance Factories Board and Defence Public Sector Undertakings may be spreading the funds too thin.

Antony’s directive for “more focused spending” means these agencies will now have to prioritise expenditure.

The re-look at expenses comes at a time the defence ministry is implementing austerity measures. The attack on profligate spending is visible but its efficacy is debatable in a season where allegations of kickbacks in a VVIP chopper deal have resurfaced.

“Integrity is not for sale” and “Nail the corrupt” read some of the banners put up by the vigilance wing in the ministry’s South Block offices last week.

The armed forces have been asked to schedule major exercises in a way that their formations can be rotated in the field every three years. The army, for example, has drawn up a timetable that exercises each of its corps fully only once every three years. The air force has had to defer a countrywide exercise named “Livewire” from this year to the next.

The armed forces may now also have to reassess the rationale of participating in exercises abroad. The air force is scheduled to send a contingent of Sukhoi 30 MKi aircraft and crew to the Red Flag exercise in Nevada, US, next year. The drill, one of the most complex in combat aviation, is costly. It cost the exchequer upwards of Rs 100 crore when the IAF participated in Red Flag the first (and last) time in 2008.

But more than the exercises, the armed forces will now worry if Antony’s directives could lead to a postponement of big-ticket acquisitions. The most important of these is the contract for 126 medium multi-role combat aircraft for which the French aircraft Rafale has been selected. The contract is yet to be signed.

On Tuesday, India’s ambassador to France Rakesh Sood said he expected the contract, which could be upwards of $12 billion (nearly Rs 66,000 crore), would be signed in “the next three to four months”.

Air Chief Marshal N.A.K. Browne also expects that to happen in the same period. But a ministry official today described the timeframe “as a little too ambitious”.

This has led the IAF to wonder if the contract would come through at all in the current financial year.