Bangalore: Keeping its promise that the economic slowdown would not be allowed to impede plans to modernize the military, the United Progressive Alliance (UPA) government increased defence spending by almost a quarter to Rs1.41 trillion in its farewell budget.
The allocation for the next fiscal year, in the interim budget unveiled by stand-in finance minister Pranab Mukherjee, is the highest the UPA government has made for defence in its five-year tenure.
The money earmarked for capital expenditure, or to buy weapons systems, has increased by one-third to Rs54,824 crore, or nearly 39% of the entire defence budget, for the year to March 2010.
“The government went ahead with this knowing that there is no opposition for modernization of its military,” said Bharat Karnad, professor at the Centre for Policy Research, a New Delhi-based think tank. “Though the figure looks pretty huge, if you take inflation, it is about the same (level of) capital expenditure.”
India is expected to spend at least $30 billion (Rs1.46 trillion) on the purchase of weapons systems by 2012, the bulk of it on importing fighter jets, artillery guns, helicopters and missiles, according to a study by the Associated Chambers of Commerce and Industry of India, a lobby of trade associations.
The biggest portion of this would be spent for the Indian Air Force to acquire 126 fighter jets, estimated to cost at least Rs42,000 crore.
On 11 February, defence minister A.K. Antony had said the economic slowdown would not hinder India’s military modernization plans.
In his speech in Parliament, Mukherjee, the external affairs minister, cited the late November terrorist attack in Mumbai in which at least 183 people were killed.
“We are going through tough times. The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism,” Mukherjee said. “A threshold has been crossed. Our security environment has deteriorated considerably.”
Defence expenditure in the year to 31 March is estimated at Rs1.14 trillion. This year’s increase in defence capital expenditure is the second highest in percentage terms since the UPA government came to power in May 2004.
In its 2004-05 budget, the UPA’s spending on capital equipment increased nearly 60% to Rs33,483 crore.
But some analysts say that though the government has been increasing its budget allocation for defence, its utilization is questionable as also its commitment to promoting self-reliance in defence technologies.
Deba Ranjan Mohanty, a senior fellow at the Observer Research Foundation, a strategic think tank in New Delhi, said nearly Rs3,000 crore allocated to capital expenditure was unspent during the year. “Utilization of the resources are still a major challenge for the Indian security establishment.”
India, which spent Rs6,486.35 crore for defence research and development (R&D) in 2008-09, reduced it to Rs4,000 crore in the interim budget, Mohanty said.
“The budgetary allocation in military R&D is extremely disappointing. Self-reliance in defence technology is very little,” he added.
India imports nearly 70% of its arms requirements, a far cry from the dream of the country’s first prime minister Jawaharlal Nehru to achieve self-reliance, the defence minister said at a seminar in Bangalore earlier this month.
“Though I don’t visualize a day when we can have zero imports, depending on other countries for 70% of our defence needs is not acceptable,” Antony said.