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Sunday, December 05, 2021

House panel for defence raps govt for gap in budget projection, allocation

In the report tabled in Parliament on Friday, the committee said it has recommended creation of such a fund earlier as well and mentioned that while Defence Ministry is in favour of such a fund.

Written by Krishn Kaushik , Sushant Singh | New Delhi |
March 14, 2020 12:52:23 am
defence minister rajnath singh, rajnath singh defence, india pakistan, pakistan state sponsored terrorism The committee has recommended that the Defence Ministry “take up the matter at higher levels” for creation of such a fund “so that procurement can be done unhampered without pursuing for funds to receive at supplementary or additional grants stages”. (File)

The Lok Sabha’s Standing Committee on Defence has come down heavily on the government for the 35 per cent gap in capital outlay for the services compared to the projected demand at a time when China is becoming a major presence in Indian Ocean Region, and both China and Pakistan remain threats.

The standing committee has again recommended a non-lapsable fund for defence modernisation even as the 15th Finance Commission is looking into creating a non-lapsable fund for defence and internal security. In the report tabled in Parliament on Friday, the committee said it has recommended creation of such a fund earlier as well and mentioned that while Defence Ministry is in favour of such a fund, the Finance Ministry had rejected the proposal and wanted the current system of annual authorisation of budget from Parliament.

The committee has recommended that the Defence Ministry “take up the matter at higher levels” for creation of such a fund “so that procurement can be done unhampered without pursuing for funds to receive at supplementary or additional grants stages”.

The committee has noted in its reports on Demand for Grants for 2020- 2021 that there “is a considerable shortage” and said “such situation is not conducive for preparation of country to modern day warfare…”

The report emphasises that the 35 per cent shortfall between demand projection and the allocation of the budget “would affect acquisition of latest weaponry, aircraft, ships, tanks and capital intensive projects including land, building and other infrastructure”.

The total capital allocation as provided in the budget this year is Rs 1,13,734 crore, when the projection provided by the armed forces was Rs 1,75, 702.06 crore.

The committee has also expressed concern over the burgeoning pension bill of the defence forces which in the last decade has increased over 3.5 times — from Rs 37,336 crore in 2010-2011 to Rs 1,33,825 crore in this budget. The share of pension in the total defence budget has shot up by 50 per cent in the same period. “The issue of burgeoning Defence pension liabilities unanimously emerged as one of the biggest challenges as the pension budget has increased approximately 3.5 times since the last decade,” the report noted.

In his deposition before the standing committee, the Defence Secretary had acknowledged that the increase in pensions “is the biggest challenge in some ways because as was shown in the graph, our pension budget has increased 4-5 times in the last 10 years and everything else dwarfs in comparison”.

“….the reasons for increase of pension are many. One of them is increase in longevity of people, increase manpower over the years for various new platforms that we continue to inculcate, revision of pension scales from time to time, etc. This is a liability today, which is a committed liability as it happens. … The Ministry is very consciously aware of this,” the Defence Secretary was quoted to have told the committee in the report.

There are a total of 32,35,730 crore defence pensioners and approximately 55,000 defence pensioners are added each year.

Among the major challenges posed by the defence budget, the ministry had highlighted “Increasing Pension Liabilities”, “Share of pensions in Defence Budget has gone up by over 50%,” and “Percentage of Capital Expenditure has been reducing continually”.

“Considering such apathy towards allocation in Capital Acquisition fund, the Committee are wary of the fact that without sufficient allocation for Committed Liabilities, there would be difficulty in matching deadlines in the payments towards already committed purchases. Similarly, if there is no budget available for New Schemes, there would be no procurement for latest weaponry and modernization would take a back seat,” the committee observed.

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