Expressing concern over the decreasing share of capital allocation in the defence budget compared with the revenue component, adversely the Parliamentary Standing Committee on Defence said the Defence Ministry should overhaul its planning and budgeting mechanism to ensure “a prudent and equitable distribution of funds to revenue and capital heads”.
“Both components are equally important aspects of the budget; however, the committee members are deeply anguished to note that with each year, the ratio of revenue-to-capital outlay is skewed as the budget for capital acquisitions for the services is declining in comparison to revenue allocations, adversely affecting the modernisation process of our forces,” the panel said in its observations.
These observations were part of the report presented in Parliament last week for “action taken by the government on the observations/recommendations contained in the 31st report”.
“The committee feels that the Ministry’s reply is not corroborated with the facts as 2012-13 onwards, the ‘capital’ component of the budgetary allocation has witnessed a persistent decrease in comparison to ‘revenue’ component of the budget…,” the report said and asked the Ministry to present figures for ratio of revenue-to-capital accounts for 2017-18 at the earliest.
Ministry’s reply
To the committee’s recommendation in the earlier report, the Ministry replied that while revenue outlay expenditure follows a pattern due to its inherent characteristics, capital outlay fluctuates depending on milestone payments and new accruals, which may not necessarily increase every year.
The revenue component caters to salary, other recurring expenses, requirement of stores, transportation, revenue works and maintenance and others, while the capital component is for procurement of weapons and systems.
