India Plans 7% Increase in Defense Budget

[foxhound]

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News Update:

Posted 03/05/07 16:53Print this story India Plans 7% Increase in Defense Budget

By VIVEK RAGHUVANSHI, NEW DELHI


India’s proposed 960 billion rupee [U]($21.8 billion) defense budget [/U]for fiscal 2007-’08 reflects a 7 percent increase over the current spending plan, with 67 percent earmarked for pay and personnel expenses and the remaining 420 billion rupees set for procurement.

While the Army, at 340 billion rupees, would receive the largest portion of the defense budget, the Air Force would get the largest portion of procurement funds — 159 billion rupees — because of its urgent requirement for modern aircraft and related equipment.
The country’s 6.8 trillion rupee federal budget proposal for the next fiscal year, which begins April 1, was presented to the Indian Parliament Feb. 28 by Finance Minister Palaniyappan Chidambaram.

Under the current budget, the Ministry of Defence has 374 billion rupees to spend on weapons and equipment. About 30 billion rupees of that was returned to the overall pot because the MoD didn’t spend it in the time allotted. It has been reallocated for procurement in the new proposal.
Ministry officials explained that the unspent amount was returned as some deals are still being finalized and could not be inked by the close of the fiscal year, including the purchase of 126 medium-range multirole combat aircraft (MMRCA) for the Air Force and 155mm guns for the Army.
Rahul Bhonsle, a defense analyst and retired Army brigadier, said the “ability to timely expend allotted funds is marred by a lack of credible sources of [equipment] supplemented by extensive paperwork.”
Deba Mohanty, a defense analyst with the Observer Research Foundation here, said the unspent money syndrome could be corrected by streamlining the time frame of defense purchases and the approval process and making transparent the financial management within the Ministry of Defence.
Chidambaram assured Parlia-ment that funds will not be a problem for defense.
“Needless to say, any additional requirement for the security of the nation will be provided,” he said in announcing the budget proposals.
Defence Minister A.K. Antony said, “With this commitment by the finance minister, we are satisfied.”
Bhonsle said there appears to be a reasonable balance in the proposed budget.
“One time there was a perceptible skew towards the Army, which seems to have been corrected,” he said.
The budget proposals will now be put to a vote in Parliament during the ongoing budget session, slated to last about two months.
Air Force
The proposed defense budget calls for the Air Force to receive 205 billion rupees, of which 103 billion rupees would be allocated for buying new aircraft and aero engines and 56 billion rupees for “other equipment.”

An Air Force official said, the bulk of the money will be used to make a partial payment for the MMRCA program, a request for proposals for which is likely to be issued this year. The remaining money will be used to buy 40 Sukhoi MKI aircraft contracted last month with Russia, make a partial payment for the Sukhoi MKI aircraft being manufactured at Bangalore-based Hindustan Aeronautics, buy the 66 British Hawks contracted in 2004 and three airborne warning and control system (AWACS) aircraft.
The planes, Il-76 transports bought from Russia, are being fitted with Phalcon radars in Israel. Deliveries will begin by the end of this year. More money, under the “other equipment” line item, will be needed to buy unmanned aerial vehicles (UAVs) and helicopters.
The Air Force also is negotiating the purchase of advanced radar, beyond-visual-range missiles and air defense systems.


Army

The Army would receive 113 billion rupees for new weapons and equipment. The service likely will issue a request for proposals this year for the 155mm guns, and a deal to buy 197 helicopters likely will be finalized in the current budget year. The service also is looking to buy air defense systems and advanced missiles, and would fund the licensed production in India of T-90 tanks and the modernization of T-72 tanks.“In the Army, the acquisition of 155mm guns has been hanging fire for far too long. To establish a firepower supremacy, we need to upgrade our artillery equipment without further loss of time,” said Gurmeet Kanwal, a retired Army brigadier and a defense analyst with the Centre for Air Power Studies here. “Also, C4ISR modernization is lagging behind.”

Navy

The overall budget for the Navy would be 172 billion rupees, of which 102 billion would be spent on procurement. The sea service wants to buy seven warships, six conventional submarines, 17 anti-submarine warfare helicopters, 12 long-range maritime patrol aircraft and an unspecified number of UAVs.
In addition, some money will go toward leasing two Akula-II nuclear submarines from Russia as well as for work being done in Russia to refit the Admiral Gorshkov aircraft carrier and build three stealth warships, currently under construction.
Defense Research

The Defence Research and Development Organisation would get 58.9 billion rupees, or 6.1 percent of the MoD’s budget, of which 27 billion would fund ongoing equipment development projects, including the Kaveri engine for the Light Combat Aircraft, three mini-AWAC systems, an anti-ballistic missile system, a new-generation Barak air defense system, a new generation of quick-reaction missiles and high-altitude UAVs, a Defence Ministry official said. •

 

[MirBadshah]

with 67 percent earmarked for pay and personnel expenses and the remaining 420 billion rupees set for procurement.

67% going to pay and personal expenses......................lol

33% for new purchases, operations, construction and R&D.

 

[Awesome]

Lol so they needed more money to buy the MRCAs!

Now we know what was keeping them... So let's see what they buy with the the 9 Bil they've been handed.

 

[Neo]

Indian economy is growing by 8% per annum, expect the increase in defence budget to be much higher than 7%, specially if the (proposed) demand to reserve 3% of GDP for defence is approved by the government.

 

[MirBadshah]

A couple of years back 80% of Indian defence budget was going towards salaries now it have gone down to 67% because of increase in budget size. Still it is massive to spend 67% on pay and also Indian forces are demanding from government to recruit another million troops........

If that happens they would have to double the present budget. And even if they dont recruit new troops, present ones are demanding pay rise, a 30% pay rise would mean entire defece budget going to salaries, it is quite an intresting situation.

 

[Neo]

Another million...??
You got to be kidding me!

 

[Neo]

We've just decreased our Army, its down to 495.000 from 720.000 IIRC.

 

[Adux]

These are the Pay Recommendations made by the

Army/Navy/Airforce to 6th Pay Commison


Army/Navy/Airforce-Existing Pay Scale Proposed Pay Scale

Lt/Sub Lt/Flying Office 8,250-10,050 43,650-53,070
Capt/Lt/Flight Lt 10,000-11,950 52,975-62,875
Major/Lt.Cdr/Sqd.Ldr 12,800-16,550 67,700-86,700
Lt.Col/Cdr/Wing Cdr 15,000-20,330 80,000-101,000
Col/Capt/Group Capt 17,000-23,400 90,550-114,000

Brigadier/Commodore/
Air Commodore 19,199-20,450 100,000-120,000


Maj.Gen/Rear.Adm/ 18,400-22,400 100,000-131,000
Air Vice Marshall

Lt.Gen/Vice.Adm/Air.Marshall 22,400-24,500 -128,000-137,000

Army Commander/Flag Officer- 26,000 137,000
Commanding in Chief/Air Officer
Commanding in Chief

All Figures are in Rs/Month and does not include perks and allowances.
$1 - Rs. 42.23

What the Chief has asked for

1. Common Payscale for all the three services. Close to 5 fold increases in pay-hike for officers and men
2. One-rank-one-pay and merger of rank pay
3. Stipend for recurits to be converted to pay.monthly stipend for Rs.10,000 for National Defence Academy Cadets.
4.Lump Sum resettlement grant for Short Service Commission officers after 10years at the rate of Rs.100,000/year.
5. Hike House Building Allowance to Rs.25,00,000(25 lacs or 2.5 million)

This would mean our Soldier on enlistment at officer level would get an approx 15550 dollars/year while the Chief would get an year of 40100 dollars/year. That is just hard cash, perks and allowances are extra. this is a very good move by the Indian Government if approvedAll the figures and Data are taken from Sandeep Unnithan's Article in India Today(May 14 2007)


I have actually taken the time out to type out these points to the discussion board, it would be great if the members could contribute some very value view points.

 

[Adux]

The basic idea of of the payscale increase is to give MORE CASH to the personal.
Look at it from a age perspective, what is the age of an officers till being a colonel, in most case nearing 40 or lil above. 100,000/month for a 35-45yr old executive is no suprise today.
I actually think the money is just about OK, I dont think pay still high enough.

In the other industry you dont have to give up your life. This is one job you cant jump out off, There is enormous physical and mental dangers, you have move around, so does your family, you are responsible for lives of many under you. I would call it rs.5000- 20,000 short.

Armed Forces is satisfied with perks and allowances, they are just bothered about money in hand very soldier gets. I wouldnt call 67,000 for a fighter pilot a high amount at all,
If you are a commerical pilot in india your monthly salary is 140,000/ month

 

[Adux]

This is a very serious and interesting development. This pay-scale increase would definitly bring up Indian Armed Forces standard quite a bit, You could see a sudden increase in talent.

This increase will cost the Indian Tax payer: 0.6% of the GDP more. Of the Current 2.6% Defence Budget 1.1% is spend on salaries, therefore this increase would make it 1.7% on salaries, which will also lead to corrseponding increase in the defence budget to that of 3.5%; 3% is already in the horizon for India from the Next defence budget. The increase will be only in the basic pay and there are no plans now to increase perks and allowances.

Armed Forces has also decided to implement cost-cutting measures in its Logistics as well as other areas.

 

[Neo]

Six percent of GDP?? Parliament will never allow the increase to cross 3% mark, it will hurt your economy.

 

[Adux]

Six percent of GDP?? Parliament will never allow the increase to cross 3% mark, it will hurt your economy.

(0.6%).6% of GDP more., read properly Neo.. Before I take my long deserved vacation.Atleast we can finsih off one Debate.

 

[Neo]

You editted the post lol....it said 6% of GDP first

 

[Adux]

You editted the post lol....it said 6% of GDP first

i wrote it as .6%, but i will give you the benfit of the doubt.

Anyways i do think this the right way for the Indian Government. and it is going to improve the lives of 1.2 million people. which is quite an achievement

 

[Neo]

Okay, my bad.
Btw, I like the Chinese model, pensions come under civil budget.
Imho thats the right way to see it.