The Capital-to-Revenue ratio is very different in the three armed forces. While the Indian Navy and the Air Force spend more than half their budgets on capital assets, the Indian Army spends less than 20% on average on capital. Worse still, earlier, the Capital-to-Revenue ratio in army expenses reduced from a 17:83 in the budget estimate to 11:89 in the actual expenditure, implying that higher than expected revenue expenses were eating away at the already sparse capital funding.
The Indian Army’s revenue expenses are increasing rapidly over the past few years. Since the sixth pay commission came into force around 2008-09, both salaries and pensions for army soldiers have become ballooning numbers for the exchequer. As a result, while budget estimates for capital expenses have flattened out, the actual expenditure on capital is actually declining rapidly in the army. What is particularly alarming is that the army’s capital expenditure is decreasing even in nominal terms – and is far worse once inflation is factored in.
And to make things worse - both the army and air force have developed some sort of a "love" for foreign maal - which thankfully the navy hasn't! The reason why though the Navy gets the least from the defence budget - but it modernizes the most of all the wings of the Indian armed forces.
The way the Indian Navy backs homegrown defence projects is indeed commendable - just look at the contrasting approach of the IN and IAF towards the LCA!