New Delhi, Jan. 12: The government has ordered a cut of Rs 13,000 crore in the budgets of the army, navy and the air force meant for buying major weapons and systems in a military modernisation drive that the Narendra Modi regime has promised.
A source in the defence ministry said today that 'we are re-appropriating Rs 13,000 crore from the armed forces' capital outlays towards revenue expenditure'.
This effectively means running the military at its current strength itself is proving to be so expensive that the government is left with little for the purchase of new guns, warships and fighter planes to replace outdated weapons.
Each of the three services will have between Rs 4,000 and Rs 4,500 crore shaved off their capital outlays.
The capital outlay in the maiden budget of the Modi government - which finance minister Arun Jaitley presented in July last year when he was also defence minister - was Rs 94,587 crore in the total defence allocation of Rs 2,29,000 crore. About 80 per cent of the capital outlays go into committed liabilities - contracts already executed for purchases.
The cut effectively shelves a navy effort to order three additional frigates of the Shivalik class (to be made at Mazagon Docks, Mumbai), an army-air force joint effort to acquire attack helicopters (the Apache-64D, made by the US-based Boeing) and an army plan to buy new small arms.
The slash also puts the brakes on a tottering IAF programme to buy medium multi-role combat aircraft (Rafale, by France's Dassault Aviation) within this financial year.
A parliamentary standing committee on defence, chaired by BJP MP and retired Major General B.C. Khanduri, estimated in a report earlier this month that the IAF's plan to buy the Rafale alone will require Rs 15,000 crore in the first year.
The programme to buy the attack helicopters may yet go through, with the US President Barack Obama set to be the chief guest at the Republic Day parade on January 26.
Part of the reason to re-allocate funds meant for capital purchases under the revenue head is a government decision to implement the demand of military veterans for 'one rank one pension' (OROP).
Defence minister Manohar Parrikar, who took over from Jaitley, said in an interview to a news channel this evening that he had estimated the outgo for OROP at Rs 6,000 crore to Rs 8,000 crore. But the controller-general of defence accounts puts it at Rs 14,200 crore.
In the interview, Parrikar blamed A.K. Antony, the defence minister in the UPA II government, for the backlog in acquisitions that he was now trying to overcome.
Last week, Parrikar had said a revamped defence procurement policy for faster acquisition of weapons would be implemented by March this year.
