The Parliamentary standing committee on defence has asked the defence ministry to “take concrete measures to exercise prudent and effective budgetary planning” and once again “highlighted the negative effect of persistent trend of decreased allocation of funds as compared to the projected amount meant for Capital Expenditure for the (defence) Services”. It also pointed out that from “2012-13 onwards, the ‘Capital’ component of the budgetary allocation has witnessed a persistent decrease in comparison to ‘Revenue’ component of the Budget”.
The committee, which is headed by BJP MP BC Khanduri, presented its 35th and 36th reports to Parliament Tuesday. Stating that “Air Force is a capital-intensive Service and requires regular technological advancements in the infrastructure and combat systems”, the committee said it was “concerned about the adverse and cascading effect that deficiency of funds could lead to especially on modernisation and operational preparedness of Air Force”.
Highlighting the reduced strength of fighter squadrons with the IAF, the report notes that “the issue of depletion in squadron strength has been taken up repeatedly by the Committee over the years. However, no concrete measure seem to be taken hitherto”. Against a desired strength of 45 fighters squadrons, the IAF currently has 33 squadrons which “will further go down to 19 by 2027, and may further reduce to 16 by 2032”, the committee noted.
The committee also criticised the defence ministry for its “persistent failure to utilise the allocated funds” which “has contributed to reduction in Ministry’s budget allocations by the Ministry of Finance”.
In its response to the committee, the defence ministry submitted that there has been under-utilisation of the capital budget with reference to budget estimates (except in 2016-17). The ministry had also said that one of the main reasons for incurring lower expenditure as compared to budget estimates was the reduction in allocation at the revised estimates stage, which leads to shifting of large payments to the subsequent financial year.
The finance ministry has also rejected the committee’s proposal for creation of a Non-Lapsable Fund specifically for the capital budget of the defence ministry. The latter ministry had taken up a case for creation of such a fund in February and May, but the finance ministry turned down the proposal in July.
In its letter to the defence ministry, the Ministry of Finance cited the main reasons for rejecting the proposal as “non-availability of balances in the non-lapsable funds to the Ministry of Defence automatically as it requires Parliament sanction, unnecessary parking of funds which makes them unavailable for other essential expenditure and possibility of competing demands from other Ministries”, the committee noted.