Parliament panel slams MoD's 'lackadaisical approach'

Parliament’s standing committee on defence has sharply criticised the allocation of funds to the Indian Air Force (IAF), given its long shopping list of aircraft needed for boosting air power.

The government has allocated the IAF less than half the capital budget the service had requested for this year, with no funding for purchases like the Rafale fighter and modernisation of Jaguar fighters and IAF bases.

The committee notes that “…as per (Defence) Ministry’s own submission the impact of shortfall in Capital Budget will lead to slowdown of modernisation, delay in induction of new capabilities and resultant asymmetry in capability with respect to threat perception… This appears to demonstrate a lackadaisical approach of the Ministry.”

The parliamentary panel reveals in its ‘Fourth Report on Demands for Grants (2014-15)’, tabled on December 22, that the IAF had projected a requirement of Rs 62,408 crore for capital purchases this year. Against that, it was allocated Rs 33,711 crore, half its request.

“The committee is baffled at such a meagre allocation as Air Force has a long list of projects planned for induction during the year 2014-15…” the committee notes, listing out the Rafale fighter; the planned fitment of high-power engines into the fleet of 100-plus Jaguar fighters; a range of new helicopters, and an on-going project to modernise all the IAF’s air bases.

While the IAF’s capital allocation of Rs 33,711 crore amounts to one-third of the total defence capital budget, most of this — Rs 31,056 crore — is pre-committed for ‘Committed Liabilities’, i.e. instalments due on purchases made in earlier years (many defence buys are paid over a duration of 7-10 years).

For ‘New Schemes’, the IAF has been allocated just Rs 2,645 crore, barely one-fifth of the Rs 12,395 crore that the air force said was required.

The first instalment of a fresh defence contract, payable at the time of signing, is usually 15 per cent of the contract value. In projecting a demand of Rs 12,395 crore for ‘New Schemes’, the IAF was effectively demanding the wherewithal to sign fresh contracts worth Rs 82,633 crore. That means, with Rs 12,395 crore paid out this year as the signing amount, liabilities worth Rs 70,238 crore would be carried forward as ‘Committed Liabilities’ payable from future budgets.

Instead, by allocating Rs 2,645 crore for ‘New Schemes’, the government has allocated the IAF the funds to sign fresh contracts worth about Rs 17,633 crore. After the down payment this year, about Rs 15,000 crore would be carried forward to the coming years.

The committee is as scathing about the slashing of the IAF’s revenue budget. Against the IAF’s projection of Rs 27,073 crore, the government allocated only Rs 20,507 crore, a shortfall of Rs 6,566 crore. Since the government could only marginally bring down the IAF’s projected payroll of Rs 11,032 crore (by Rs 702 crore), deep cuts came in the non-salary expenditure, which includes cost of fuel, transport and training. Under this head, the IAF’s request for Rs 16,642 crore was pared by Rs 5,765 crore to Rs 10,877 crore.

Terming the scenario “dismal”, the committee recommends that additional revenue funding be provided, especially for aviation fuel, “since scarcity for fuel will adversely impact training facilities and the committee are apprehensive that any compromise in training will be detrimental for the safety of our pilots. The Committee wants to be intimated about the same.”

The committee has also strongly backed the IAF’s repeated pleas to boost its strength of fighter squadrons. The IAF has told the panel that against its sanctioned strength of 42 squadrons (each is authorised 21 fighter aircraft), there are only 25 squadrons available today, with another 14 squadrons of MiG-21s and MiG-27s retiring by 2024.

The report says the “country’s security requirements are being compromised by ignoring consistently widening gap between sanctioned and existing strengths. The committee desire that concrete and prompt steps be initiated expeditiously to induct sufficient number of functional platforms and a status report in this regard be submitted to the committee.”