Fund cut may result in postponement of Def Min's key purchases

The Defence Ministry has faced a cut of over Rs 7,800 crore in its modernisation funds which may result in postponement of finalising some key military purchases such as attack choppers and mid-air refuelling tankers, officials said.
There was a cut of more than Rs 7,800 crore in budget of Rs 2.03 lakh crore by the government and to meet the requirements of paying for pensions and fuel, this amount was transferred from the capital budget to the revenue expenditure, the Defence Ministry officials said.
Last year as well, the ministry had faced a budget cut of more than Rs 10,000 crore in view of the economic slowdown in the country.

Due to shortage of funds, deals for procuring Apache attack choppers, Chinook heavylift choppers and Airbus tankers are likely to be signed next year.
Utilising its full allocation of funds and reversing the earlier trend of limited utilisation, the ministry procured and upgraded a large chunk of military equipment, including nuclear submarines, special operations transport aircraft and fighter planes.
This financial year, the ministry has already spent 82 per cent of the capital acquisition budget of around Rs 80,000 crore and is slated to fully utilise its allocation.

The procurements included 10 C-17 heavylift and 12 C-130J transport aircraft, 12 P-8I anti-submarine warfare planes, Akula-II class nuclear submarine (on lease) and Su-30MKI aircraft.

Besides, money was spent on developing the indigenous LCA Tejas for the IAF and to upgrade 51 Mirage-2000 combat planes.
In 2009-10, the ministry spent Rs 51,112 crore, which was 106 per cent of the allotted funds whereas, in the next fiscal, it spent Rs 62,056 crore, or 102 per cent of the allocation, sources said.
In 2011-12 and 2012-13 also, the ministry continued the trend by spending over Rs 1.38 lakh crore, more than 102 per cent of the modernisation budget, they said.
For this fiscal, the ministry's allocation was Rs 2.03 lakh crore, of which around Rs 86,000 crore were to be spent on modernization. As per the revised estimates, the Ministry is left with Rs 78,000 crore for modernisation.

So far, 82 per cent of those funds has been spent. The balance would also be spent in the next few weeks.