In a situation of heavy pressure on the economy, while also confronting an intrusion by Chinese troops on the border in Ladakh, the government has kept the defence budget at approximately the same level as the current year, allocating Rs 4.78 trillion for 2021-22.
The revised estimates for 2020-21 indicate that the military has spent Rs 4.84 trillion this year, a significantly higher amount than what was allocated in February 2020.
The reason for this is learnt to be the emergency procurement of arms and ammunition that was triggered by the Chinese intrusions into Ladakh last April. Against Rs 1.18 trillion allocated for capital spending in the current year, the government spent Rs 1.37 trillion – almost Rs 20,000 crore extra.
Much of the money for the extra capital spending was found by squeezing the pension budget. Of the Rs 1.33 trillion allocated for defence pensions, the government spent only Rs 1.25 trillion. For the coming year, the government has slashed defence pension allocations by another Rs 9,000 crore.
Defence experts, many of whom have lamented the large share of the defence budget consumed by pensions, say the reduction is being made possible by the plan to increase the retirement age of soldiers, sailors and airmen. This has been proposed by Chief of Defence Staff General Bipin Rawat.
Expenditure in the current year’s capital budget is biased heavily in favour of the Indian Air Force (IAF), which has spent Rs 55,084 crore, compared to the Navy’s Rs 40,043 crore and Army’s Rs 33,283 crore.
The Army has the smallest share in the capital budget, even though it is facing the brunt of Chinese intrusions in Ladakh and has undertaken a challenging winter deployment in the 15,000-ft-plus heights there.
The capital budget allocations for the coming year, 2021-22, are similarly skewed, with the IAF allocated Rs 53,215 crore, the Navy Rs 35,904 crore and the Army getting Rs 36,532 crore.
This underlines the IAF’s continuing burden of payments for the Rafale fighters it bought in 2016, modernisation of the Mirage 2000 fighter fleet and manufacture of additional Sukhoi-30MKIs and Tejas fighters by Hindustan Aeronautics (HAL).
There is also a large expenditure looming on a tender for 114 multi-role fighters, for which the IAF has initiated global procurement.
To the military’s credit, it has mobilised a large number of troops and equipment to the Ladakh frontier without overshooting its revenue budget, from which payments for such a deployment is made.
Against the revenue budget allocation of Rs 2.19 trillion for the current year, the military has spent Rs 2.22 trillion on its operations countrywide, including in Ladakh.