FM gives armed forces less than asked for

[CONNAN]

The NDA government has increased the allocation for the armed forces marginally to Rs 2,46,727 crore in FY16, compared with Rs 2,22,370 crore this fiscal, but the capital outlay remains unchanged at Rs 94,588 crore.

The capital allocation is used for buying new weapons and equipment for the forces and, according to experts, this is not sufficient to fund the forces’ planned modernisation and technology acquisition plans for the year.

The armed forces had raised a demand for Rs 3,10,080 crore for the 2015-16 fiscal. They wanted Rs 97,776 crore for non-Plan capital expenditure and Rs 400 crore for Plan capital expenditure. The non-Plan revenue expenditure the forces proposed was Rs 211,853 crore, apart from Rs 50 crore under the Plan revenue expenditure.

However, the forces got Rs 64,357 crore less than what was sought in the overall Budget. The allocation for buying new weapons is Rs 3,288 crore less than what was asked for.

Considering that the defence budget hike is just Rs 17,727 crore more than the previous fiscal’s budgetary estimate of Rs 229,000 crore, it is just a 7.74 % hike. However, in percentage terms, it goes up to 10.95 when compared against the revised estimates of 2014-15 that stood at Rs 222,370 crore. The defence budget for 2015 is just 1.75 % of GDP. This is less than 1.78% allocated in the last Budget in July 2014.

The air force has got a capital allocation of Rs 33,108 crore, which is a decrease from 2014-15 when it got Rs 33,310 crore. However, the allocation for aircraft and aero-engine purchases has gone up by Rs 2,595 crore to Rs 18,866 crore. The allocation was Rs 16,271 crore in 2014-15. The army’s capital allocation has gone up to Rs 26,225.32 crore from the previous year’s Rs 24,979.86 crore. The navy’s funds for capital acquisition have been slashed to Rs 6,736 crore, compared to last year’s Rs 8,615 crore. The ordnance factories have got a budgetary allocation of Rs 2,884 crore, while DRDO has been given Rs 6,570 crore. According to an industry observer: “This hike for aircraft and aeroengine purchases may not be sufficient to fund the estimated $20 bn Medium Multi Role Combat Aircraft (MMRCA). Besides this, almost 75% of the new budget will go in making payments for old deals. This hardly leaves funds for buying anything new.”

However, the defence ministry had told the parliamentary standing committee in late 2014 that when the MMRCA is contracted, additional funds would be made available. As soon as the contract gets signed, India has to make a down payment of 15 % of the contract amount to the original equipment manufacturer.

Besides the MMRCA, payments need to be made for 145 Ultra-light Howitzers, 15 Apache attack helicopters and 22 CH-47F Chinook medium lift helicopters. The navy needs submarines and stealth ships to counter the Chinese presence in the Indian Ocean.

Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG, says, “The finance minister has increased the budget allocation by 11% to about $ 41 bn, which is positive. The industry expected major reforms in the defence sector in order. It expected ‘infrastructure status’ for the sector in order to attract tax incentives and to meet capital requirements. That has been a disappointment. We hope policy and procedural support for defence will enhance throughout the year and not be limited to just the budget exercise.”

FM gives armed forces less than asked for | The Financial Express

 

[Paksanity]

Huh...Indian forces are still unhappy?

 

[janon]

Huh...Indian forces are still unhappy?

Ah, but a man's reach should exceed his grasp, Or what's a heaven for? (Browning)

The system is setup in this manner, with the defence ministry and finance ministry opposing each other, so that checks and balances can be put on spending of taxpayers' money. If the armed forces can buy anything and everything they want, and spend as they please, the country would go bankrupt. The armed forces know fully well that not all their demands are going to be met by the FM, so they usually ask for a lot more than they know they can get. And they will express displeasure at what they get. This is all a yearly drama.

 

[magudi]

Ah, but a man's reach should exceed his grasp, Or what's a heaven for? (Browning)

The system is setup in this manner, with the defence ministry and finance ministry opposing each other, so that checks and balances can be put on spending of taxpayers' money. If the armed forces can buy anything and everything they want, and spend as they please, the country would go bankrupt. The armed forces know fully well that not all their demands are going to be met by the FM, so they usually ask for a lot more than they know they can get. And they will express displeasure at what they get. This is all a yearly drama.

Am glad they didn't overdo it. We're still recovering economy

 

[third eye]

This is all a yearly drama.

I resent the use of the word ' drama' to describe what the armed forces need.

It was precisely this attitude that lost us the war in 62.

 

[janon]

I resent the use of the word ' drama' to describe what the armed forces need.

It was precisely this attitude that lost us the war in 62.

I didn't use the word 'drama' to describe what they need. I used it to describe this yearly exercise at budget time.

 

[third eye]

I didn't use the word 'drama' to describe what they need. I used it to describe this yearly exercise at budget time.

That too is not a Drama

 

[DIRECT ACTION]

Ah, but a man's reach should exceed his grasp, Or what's a heaven for? (Browning)

The system is setup in this manner, with the defence ministry and finance ministry opposing each other, so that checks and balances can be put on spending of taxpayers' money. If the armed forces can buy anything and everything they want, and spend as they please, the country would go bankrupt. The armed forces know fully well that not all their demands are going to be met by the FM, so they usually ask for a lot more than they know they can get. And they will express displeasure at what they get. This is all a yearly drama.

our armed force is not in a good shape.. they lack basic things such as ammunition to boots... we don't have any aid providers to improve our armed force. pakistanis are criticizing our defense budget because they are jealous that we are more wealthier and stronger than them. we are beyond their reach. oru total defense sending is only 1.75% of our GDP.. while pakistani DB is close to 3% their GDP. our military don't have adequate BPJ, NVG, Helmets, artillery guns, SAMs, radars, rifles, fighter aircraft, submarines and the list goes on. and you are saying that they are getting what they want?? it is very easy to type anything you thing while sitting in an AC room. you don't know the reality. you don't know the thread india faceses.. what do you think why pakistan did't attack india?? it is only because we are more powerful than them. the reason for our failure in 62 is because of the politicians thought that the defense is something India don't need. fools like kajiwal also thinks like that. pakistan is getting military aids form may country that is why they have all these modern military equipment.. their F-16 to guns and optical sights are the result of the military aid. india don't have any luxury like that. we have endless problems and we are our own in the fight. $40 billion is nowhere near the adequate amount to effectively deal with the threat we face.

 

[janon]

our armed force is not in a good shape.. they lack basic things such as ammunition to boots... we don't have any aid providers to improve our armed force. pakistanis are criticizing our defense budget because they are jealous that we are more wealthier and stronger than them. we are beyond their reach. oru total defense sending is only 1.75% of our GDP.. while pakistani DB is close to 3% their GDP. our military don't have adequate BPJ, NVG, Helmets, artillery guns, SAMs, radars, rifles, fighter aircraft, submarines and the list goes on. and you are saying that they are getting what they want??

You think it's lack of money that is preventing the aquisition of all the said things? Then explain to me, why the defence ministry just returned more than one billion dollars of unspent money that was allotted to them in the previous budget. It is not lack of money or the finance ministry's stinginess that is preventing the forces from getting what they need - it is a ridiculously outdated system of procurement. The defence ministry's bureaucratic machinery has to be revamped, that is the only way they will be able to get what they need in a reasonable time frame. Every year, the defence ministry sends money back to the finance ministry, because they were unable to spend the money that was given to them. The solution is not giving them even more money that they can return the next year. Make no mistake - for the past several years, the MoD has been getting more money than they could spend.

it is very easy to type anything you thing while sitting in an AC room.

Yes, I'm sure you know that very well.

you don't know the thread india faceses.. what do you think why pakistan did't attack india?? it is only because we are more powerful than them.

Who doesn't know that? We are too strong for them to attack, and that disparity is only going to increase in future.

the reason for our failure in 62 is because of the politicians thought that the defense is something India don't need.

I know. But nobody believes that anymore. So relax.

pakistan is getting military aids form may country that is why they have all these modern military equipment.. their F-16 to guns and optical sights are the result of the military aid.

They loose a lot more due to their participation in the war on terror. The loss suffered to their economy and their military is immense. You think USA gives some dole to them simply because they love them?

Anyway, we cannot control what Pak gets. The fact remains that our defence budget is several times larger than theirs, even if you include the aid they get.

india don't have any luxury like that. we have endless problems and we are our own in the fight. $40 billion is nowhere near the adequate amount to effectively deal with the threat we face.

Again - the armed forces have not been able to utilize the money given to them so far, every year. Lack of money is not the issue, it is an institutional problem. If you give them a hundred billion dollars this year, but they continue to have the same process for capex procurement, then you can bet that at the end of this financial year, they would return 62 billion dollars unspent.

 

[Koovie]

Every ministry wants more money than they can (realistically) get..

 

[Echo_419]

40 billion dollar defence budget still they are Crying like bitches be happy with current budget.

@Oscar @Horus please take adequate action

The NDA government has increased the allocation for the armed forces marginally to Rs 2,46,727 crore in FY16, compared with Rs 2,22,370 crore this fiscal, but the capital outlay remains unchanged at Rs 94,588 crore.

The capital allocation is used for buying new weapons and equipment for the forces and, according to experts, this is not sufficient to fund the forces’ planned modernisation and technology acquisition plans for the year.

The armed forces had raised a demand for Rs 3,10,080 crore for the 2015-16 fiscal. They wanted Rs 97,776 crore for non-Plan capital expenditure and Rs 400 crore for Plan capital expenditure. The non-Plan revenue expenditure the forces proposed was Rs 211,853 crore, apart from Rs 50 crore under the Plan revenue expenditure.

However, the forces got Rs 64,357 crore less than what was sought in the overall Budget. The allocation for buying new weapons is Rs 3,288 crore less than what was asked for.

Considering that the defence budget hike is just Rs 17,727 crore more than the previous fiscal’s budgetary estimate of Rs 229,000 crore, it is just a 7.74 % hike. However, in percentage terms, it goes up to 10.95 when compared against the revised estimates of 2014-15 that stood at Rs 222,370 crore. The defence budget for 2015 is just 1.75 % of GDP. This is less than 1.78% allocated in the last Budget in July 2014.

The air force has got a capital allocation of Rs 33,108 crore, which is a decrease from 2014-15 when it got Rs 33,310 crore. However, the allocation for aircraft and aero-engine purchases has gone up by Rs 2,595 crore to Rs 18,866 crore. The allocation was Rs 16,271 crore in 2014-15. The army’s capital allocation has gone up to Rs 26,225.32 crore from the previous year’s Rs 24,979.86 crore. The navy’s funds for capital acquisition have been slashed to Rs 6,736 crore, compared to last year’s Rs 8,615 crore. The ordnance factories have got a budgetary allocation of Rs 2,884 crore, while DRDO has been given Rs 6,570 crore. According to an industry observer: “This hike for aircraft and aeroengine purchases may not be sufficient to fund the estimated $20 bn Medium Multi Role Combat Aircraft (MMRCA). Besides this, almost 75% of the new budget will go in making payments for old deals. This hardly leaves funds for buying anything new.”

However, the defence ministry had told the parliamentary standing committee in late 2014 that when the MMRCA is contracted, additional funds would be made available. As soon as the contract gets signed, India has to make a down payment of 15 % of the contract amount to the original equipment manufacturer.

Besides the MMRCA, payments need to be made for 145 Ultra-light Howitzers, 15 Apache attack helicopters and 22 CH-47F Chinook medium lift helicopters. The navy needs submarines and stealth ships to counter the Chinese presence in the Indian Ocean.

Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG, says, “The finance minister has increased the budget allocation by 11% to about $ 41 bn, which is positive. The industry expected major reforms in the defence sector in order. It expected ‘infrastructure status’ for the sector in order to attract tax incentives and to meet capital requirements. That has been a disappointment. We hope policy and procedural support for defence will enhance throughout the year and not be limited to just the budget exercise.”

FM gives armed forces less than asked for | The Financial Express

Infra was one of the main focus of this budget

 

[DIRECT ACTION]

You think it's lack of money that is preventing the aquisition of all the said things? Then explain to me, why the defence ministry just returned more than one billion dollars of unspent money that was allotted to them in the previous budget. It is not lack of money or the finance ministry's stinginess that is preventing the forces from getting what they need - it is a ridiculously outdated system of procurement. The defence ministry's bureaucratic machinery has to be revamped, that is the only way they will be able to get what they need in a reasonable time frame. Every year, the defence ministry sends money back to the finance ministry, because they were unable to spend the money that was given to them. The solution is not giving them even more money that they can return the next year. Make no mistake - for the past several years, the MoD has been getting more money than they could spend.

that may be because of delay in the projects. or procurement. army requires billions of dollars for its modernization.

Who doesn't know that? We are too strong for them to attack, and that disparity is only going to increase in future.

no we are not that strong against china. for pakistan?? yes we are. they are actually afraid of us. that is why they criticize every defense related agreements or tests india done.

They loose a lot more due to their participation in the war on terror. The loss suffered to their economy and their military is immense. You think USA gives some dole to them simply because they love them?

Anyway, we cannot control what Pak gets. The fact remains that our defence budget is several times larger than theirs, even if you include the aid they get

actually they gain much more than they loss.. Baluchistan, FATA and other Af-pak border regions were not under control of Pakistan government before 2001. that WoT helps them to gain controll over a last area full of minerals and gas. with the help of most advanced nations it was relatively easy task. without ISAF's help pakistan won't be able to control that area. their military get better training from US and billions of aid from US. unlike pakistan india don't have any external help.

bro, those defence budget are also for salary, maintenance of service equipment and other expenditures..

 

[janon]

actually they gain much more than they loss.. Baluchistan, FATA and other Af-pak border regions were not under control of Pakistan government before 2001. that WoT helps them to gain controll over a last area full of minerals and gas. with the help of most advanced nations it was relatively easy task. without ISAF's help pakistan won't be able to control that area. their military get better training from US and billions of aid from US. unlike pakistan india don't have any external help.

Even if it is true that they have gained more than they've lost, that's not something in our control. The fact remains that our defence budget is several times larger, even if you add all the aid they get. So mentioning the fact that Pak receives aid is a strawman.

bro, those defence budget are also for salary, maintenance of service equipment and other expenditures..

I know. And the Indian armed forces have never had difficulty paying their soldiers. Even after paying everybody, they still have been sending back unspent money every year. So money is not what is holding up modernization - it is inefficiency and red tape in the bureaucracy.