The Hindu : Sinha promises more funds for modernising Army, Air Force

Online edition of India's National Newspaper
Friday, Mar 01, 2002

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National

Sinha promises more funds for modernising Army, Air Force

By Sandeep Dikshit

NEW DELHI FEB. 28. The defence budget for 2002-03 once again perseveres with the modernisation of the Army and the Air Force, despite partial utilisation of the allocation for purchasing defence equipment in the current fiscal.

``In case of need, I shall not hesitate to provide more funds for this purpose,'' assured the Finance Minister, Yashwant Sinha, whose generous allocation has been helped by the five per cent national security tax on all tax payers.

Mr. Sinha has proposed a defence budget of Rs. 65,000 crores for the next fiscal against Rs. 62,000 crores allocated in the current fiscal. However, the Defence Ministry will spend only Rs. 57,000 crores during 2001-2002, a shortfall of Rs. 5,000 crores.

Therefore, when compared with the actual expenditure during the current fiscal, the budget for next year proposes an increase of Rs. 8,000 crores which in percentage terms amounts to 15 per cent without discounting for inflation and constant rupee depreciation. The latter is a crucial input for hard currency purchases which are slated to increase following the lifting of the sanctions. The defence forces hope to utilise the allocation more efficiently during the next financial year because of smoother procurement processes which includes the setting up of an integrated tri-services Defence Procurement Board.

Although the Defence Minister, George Fernandes, had stated that Rs. 12,000 crores was unspent on capital account till January-end, the Ministry appears to have spent Rs. 7,000 crores. This would mean that some heavy purchases have been made during February.

The allocation for the Army has been fixed at Rs. 35,368.72 crores, marking an increase of 6.69 per cent. When accounting for inflation, the allocation gets sheared to 2.59 per cent. The hike covers a number of sectors ranging from `other equipment' (tanks, artillery and electronic hardware such as weapon locating radars), welfare & housing and stores (upgradation of existing assets).

The increase on account of other equipment is a massive Rs. 1,400 crores indicating the defence planner's desire to equip the Army with more modern tools of war. It was initially feared that the Army might end up spending much less during the current year but accelerated supplies of T-90 tanks ensured that a sizeable portion of the allocation was utilised.

The Air Force gets Rs. 15,589 crores which is a whopping 30 per cent increase on the revised estimates. The allocation will mainly cater to the upgrading of the fighter aircraft (MiG-21 BiS), licence payment for manufacturing of SU-30 fighter aircraft and purchase of Jaguars from Hindustan Aeronautics Limited. The IAF is also planning to purchase three force multipliers in the form of air-to-air refuellers. Provision has also been made for the acquisition of advanced jet trainers (AJTs) and AWACS. The allocation for the purchase of American engines for the light combat aircraft (LCA) have been made in the Defence Research and Development Organisation. During the current fiscal the Air Force had to return almost Rs. 2,000 crores because negotiations on British-made AJTs were not concluded. On the welfare front, IAF gets an additional Rs. 50 crores to improve housing and other amenities for its staff.

Reacting to the budget, the Chief of Air Staff, Air Marshal S. Krishnaswamy said now it was up to the personnel to get extra mileage for every rupee allocated to the IAF.

The Navy receives Rs. 9,471.45 crores, a 8.9 per cent improvement over this year's revised allocation. It receives more for purchasing aircraft and beefing up the armada which includes French Scorpene and Russian Amur submarines. However, despite the crying need for more funds for modernising the dock-yards, the allocation has remained more or less constant compared with previous years. A higher allocation of nearly Rs. 400 crores has been made on the stores account.

On the R & D front, the allocation of Rs. 3,665 crores has gone up by Rs. 400 crores which amounts to nearly six per cent, considered a healthy figure for an armed force which proclaims considerable accent on indigenisation.

Special projects, an euphemism for largely nuclear-related projects have received Rs. 100 crores, despite the fact that the armed forces were able to spend only Rs. 35.06 crores out of the allotted Rs. 100 crores during the current fiscal.

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