Air force, navy stare at fund crunch next fis­cal

HARD-PRESSED Money al­lo­cated in in­terim bud­get not enough to meet li­a­bil­i­ties

Hindustan Times (Jalandhar) - - HTPUNJAB - Sudhi Ran­jan Sen [email protected]

NEW DELHI: The In­dian Navy and the In­dian Air Force will not have funds to pay for plat­forms and equip­ment they have agreed to buy (or have ac­tu­ally bought) in the past years in the com­ing fi­nan­cial year 2019-2020, un­less the govern­ment al­lo­cates more money to them.

The In­dian Army is bet­ter off, but in gen­eral the forces face a cash crunch, a se­nior de­fence min­istry of­fi­cial, who did not want to be named, said.

The of­fi­cial’s as­sess­ment, cor­rob­o­rated by an­a­lysts and other ex­perts HT spoke to, is based on the cap­i­tal ex­pen­di­ture al­lo­cated to the forces in the in­terim bud­get 2019-2020, and their so-called com­mit­ted li­a­bil­i­ties to­wards cap­i­tal pur­chases.

De­fence min­is­ter Nir­mala Sithara­man has al­ready been briefed about this and has taken it up with the fi­nance min­istry, this per­son added.

A de­fence min­istry spokesper­son did not re­spond to a query seek­ing com­ment.

All told, the in­terim bud­get al­lo­cates ~1.03 lakh crore to­wards the cap­i­tal ex­pen­di­ture of the three forces.

Of this, the In­dian Navy has been al­lot­ted ~23,156.43 crore. The com­mit­ted li­a­bil­i­ties for cap­i­tal ac­qui­si­tion of the In­dian Navy is ~25,461 crore, a sec­ond se­nior of­fi­cial deal­ing with the bud­get al­lo­ca­tion in the min­istry of de­fence said on the con­di­tion of anonymity. Com­mit­ted li­a­bil­i­ties are in­stal­ments paid an­nu­ally for on­go­ing cap­i­tal projects such as build­ing war­ships, air­craft, mis­sile sys­tems, etc.

“Ei­ther we are al­lo­cated more funds later in the year, or we need to cut down on ex­pen­di­ture else­where if we have to meet all li­a­bil­i­ties that we have agreed on,” a se­nior naval of­fi­cer said on the con­di­tion of anonymity.

The other op­tion is to roll over the li­a­bil­ity, a third de­fence min­istry of­fi­cial said, ask­ing not to be iden­ti­fied. Ac­cord­ing to Amit Cow­shish, the for­mer chief fi­nan­cial ad­viser to the min­istry of de­fence, “rolling over com­mit­ted li­a­bil­i­ties hap­pens, but is not a healthy prac­tice. Im­por­tantly, it re­flects poorly on the coun­try.”

The sit­u­a­tion isn’t very dif­fer­ent for the In­dian Air Force which has been al­lo­cated ~39,302.64 crore for cap­i­tal ex­pen­di­ture, but which has com­mit­ted to pay­ing ~47,413 crore this year, a fourth se­nior de­fence min­istry of­fi­cial, who did not want to be named, said. Among the big-ticket items IAF is pay­ing for are the Rafale fight­ers from France.

The army is rel­a­tively bet­ter off. It has been al­lo­cated ~29,447.28 crore. It has a com­mit­ted li­a­bil­ity of ~21,600 crore.

The In­dian Army is rac­ing against time to stock up arms and am­mu­ni­tion to be pre­pared to fight an in­tense 10-day war. The process re­ceived a boost af­ter the ter­ror at­tack at the army en­camp­ment in Uri in 2016.

In­dia is among the largest weapons im­porter in the world, ac­cord­ing to think-tank Stock­holm In­ter­na­tional Peace Re­search In­sti­tute (SIPIRI). Be­tween 2013 -17, the coun­try ac­counted for nearly 12% of all global im­ports of arms, SIPRI said in its re­port re­leased last year. The fall­ing ru­pee has only added to the dif­fi­cul­ties im­posed by the funds crunch.

Since April 1 last year, the ru­pee de­pre­ci­ated 9.4% against the US dol­lar.

Cow­shish claimed that this may be the first time in re­cent years that this is hap­pen­ing.

“It is a very dif­fi­cult po­si­tion to be in. Not pro­vid­ing for com­mit­ted li­a­bil­i­ties didn’t hap­pen in the past,” he said. HT couldn’t in­de­pen­dently ver­ify this.

“Im­por­tantly, al­lo­ca­tion of ex­tra funds is un­likely to go up later in the year,” he added.

In­ter­est­ingly, the In­dian Army is yet to get ~1,487 crore that was sanc­tioned for strength­en­ing perime­ter se­cu­rity of en­camp­ments and in­stal­la­tions, such as the one in Uri, in Jammu and Kash­mir and the north-east. This amount was promised af­ter ter­ror­ists stormed the Sun­juwan camp, the base of the 36 Brigade, last Fe­bru­ary. As many as 11 sol­diers and one civil­ian died in the at­tack apart from four ter­ror­ists who stormed the camp.

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