REPORT OF THE ESTIMATES COMMITTEE ON DEFENCE
Nothing concrete has been done for implementation of the strategic partnership model unveiled by the Government in May, 2017, which envisaged private players playing a key role in building military platforms like submarine and fighter jets in India in partnership with major global defence companies
Increasing the Expenditure on Defence Services
The Committee notes that India with its strategic location, with a coastline of about 7,500 km and land borders of 15,000 km of which 3,323 km are with Pakistan and 3,380 km with China, its western, north-western, northern and north-eastern borders remain volatile because of historical as well as strategic reasons and internal security threats, need defence preparedness to be kept consistently at the highest level. From the data made available to the Committee, it was found that defence expenditure has marginally increased since 2014-15 and when compared to Central Government Expenditure (CGE), the percentage has declined from 13.15 during 2014-15 to 12.20 during 2017-18. Defence expenditure when analysed as a percentage of GDP, in the last few years it has ranged between 2.06 per cent (2014-15) to 1.56 per cent (2017-18). The Committee noted that the defence expenditure at 1.56 per cent of GDP was at the lowest level since 1962, when India-China war was fought. In the current geo-political scenario, a country of the size of India cannot afford complacency when it is a question of defence preparedness even for a two-front war while retaining its dominance in the Indian Ocean. The Committee therefore, strongly emphasises that allocation of adequate financial resources for defence preparedness both for the current needs and expansion and modernisation plans should be accorded highest priority to enable the services to meet the challenges concerning safety and security of the country. The Committee expresses its unhappiness that the share of Capital Expenditure as a percentage of the total Defence Services Expenditure is abysmally low and is continuously declining over the years. In the years 201213 and 2013-14, the share of Capital Expenditure was 39 per cent in each year, which in the year 2017-18 and 2018-19 came down to 33 per cent and 34 per cent, respectively. What is more worrisome is the situation whereby the procurement has to be adjusted as per the budgetary allocations made by the Government which are not as per the requirements projected as per Long Term Integrated Perspective Plan (LTIPP). It observed that allocations under the capital head are made for procurements for our services, which include defence equipments, weaponry, aircrafts, naval ships, constructing roads and bridges in border areas, etc. and any decrease in capital expenditure has an adverse impact on modernisation process of our forces and tantamount to compromising safety and security of our country. The Committee finds the present situation unacceptable whereby the allocations are not being made as per the
LTIPP, thereby defeating the purpose of having long term defence plans. It, therefore, recommends that the capital procurement budget should be in consonance with the projections made by the services as per LTIPP. The allocations made at the Budgetary Estimates (BE) stage have been consistently reduced at Revised Estimate (RE) level, and even the reduced allocations could not be utilised fully during the years 2014-15 and 2015-16. In this scenario, the Committee was not able to appreciate the remarks of the Secretary, Defence Acquisition, during the course of deposition that they hear from the Department of Defence that the requirement of the forces is very high and the fund allocation to that extent is not there. The Committee, therefore, while recommending for adequate allocations for defence production would like the department to analyse the reasons and take corrective actions to ensure that the resources allocated are fully utilised which would help in getting further higher allocations in the coming years.
Self reliance in defence
During the course of examination, the Committee was apprised by the Department of Defence Production that out of total defence production around 40 per cent is produced indigenously and 60 per cent is imported. The Committee while expressing serious concern over the prevailing situation observed that dependence on foreign suppliers particularly for military hardware not only results in huge expenditure on import of defence equipments but makes the security of the country vulnerable as during emergency situations the supplier may not provide us the required weapons or spare parts. Nothing concrete has been done for implementation of the strategic partnership model unveiled by the Government in May, 2017, which envisaged private players playing a key role in building military platforms like submarine and fighter jets in India in partnership with major global defence companies.
Shortage of ammunitions
The Committee during the course of examination was apprised by the Ministry of Defence that the shortage strictly in the totality is not there yet there are 10-15 ammunitions where there is shortage and some of them of a critical nature. Ordinance Factory Boards (OFBs) / Defence Public Sector Undertakings (DPSUs) have achieved some expertise in armaments and weapon manufacturing, although dependency on imported parts and systems is an area of concern. As far as production of armaments by Ordnance Factories is concerned, the dependency on imports with regard to heavy equipment has considerably decreased. For T-90 tanks, the dependency on import has decreased from 40 per cent to 13 per cent as stated by the representative of MoD during the course of evidence. The Committee still feels that more needs to be done to reduce our dependency on imports.
Acquisition/ upgradation for IAF
The Committee understands that a large proportion of our defence hardware has served its useful life cycle and now need to be replaced urgently. From the information given in Annual Report 2016-17 of the Ministry of Defence, it is noted that the IAF is on a trajectory of modernisation. The draft Defence Production Policy 2018,