Defence budget 2013-14

Discussion in 'Defence & Strategic Issues' started by DivineHeretic, Feb 28, 2013.

  1. DivineHeretic

    DivineHeretic Senior Member Senior Member

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    NDTV just reporting on ticker.

    Defence budget up from Rs. 1.93lakh crore to Rs.2.03 lakh crore. An increase of Rs.10,000crore or about $2Billion. Coming as it is from the cut of Rs.14,000crore last fiscal, it might be a major relief.

    Or maybe just the fraction of money taken back from MOD in 2012 is being returned.
     
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  3. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Increase is not corresponding to inflation level, @sob said this already. IMO budgeting practice for defense sector is flawed, otherwise air tanker induction would have been never delayed.

    Sent from Nexus 7 using Tapatalk HD
     
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  4. DivineHeretic

    DivineHeretic Senior Member Senior Member

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    Ya, my understanding exactly. But the vey fact that defence allocation has not been rduced in real terms should ensure that the Rafale deal and other important pending deals get sanction by the govt.
    With current growth slipping to 5%, and fiscal deficit hovering at around 5.2%, this is probably the maximum the govt. could afford to expend. The whole budget has been a cost cutting exercise.
     
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  5. WMD

    WMD Regular Member

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    Defence Ministry gets 14% hike in 2013-14
    NEW DELHI: In the midst of a major modernisation drive, Defence Ministry today got a 14 per cent hike in its budget as Finance Minister P Chidambaram gave it Rs 2,03,672 crore for 2013-14 with a promise to provide any additional fund required for national security.

    Today's allocation is up by Rs 25,169 crore from last year's revisited estimate of Rs 1,78,503 crore. The budget estimate was Rs 1,93,407 crore but Rs 14,904 crore was slashed by the Finance Ministry owing to the strain on the economy.

    "I propose to increase the allocation for defence to Rs 2,03,672 crore. This will include Rs 86,741 crore for capital expenditure," Chidambaram said.

    "The Defence Minister has been most understanding and I assure him and the House that constraints will not come in way of providing any additional requirement for the security of the nation," he said.

    The Defence Ministry is in a major modernisation process with several acquisitions in the pipeline besides upgradation of infrastructure in the northeast along with China border.

    Among the major acquisitions in the offing are the 126 multirole combat aircraft, 22 Apache attack choppers and 15 heavy-lift choppers.

    The capital expenditure was hiked from Rs 69,579 crore last year to Rs 86,741 crore.

    Defence Minister A K Antony was satisfied with the allocation.

    "Factoring the current economic scenario, he (Chidambaram) has been fair to the Defence sector also by increasing the budget and giving an assurance that should there be any urgent need in future the same would be provided," Antony told reporters.

    Budget 2013: Defence Ministry gets 14% hike in 2013-14 - The Economic Times
     
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  6. Daredevil

    Daredevil On Vacation! Administrator

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    Hike is good but what's the purpose if they are not utilised efficiently in a time bound manner.
     
  7. sob

    sob Moderator Moderator

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    DD, the big ticket purchases are not in the hand of the Forces. MOD is responsible for it. So if money is being returned every year it is done at the behest of the finance ministry so that he has a huge war chest of cash to doctor the Fiscal Deficit figures. See post #2 on this topic.
     
  8. sob

    sob Moderator Moderator

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    ET has got it's facts completely wrong. The figures for last year were Rs. 1,93,407.29 Crores and not Rs 1,78,503 crore.
    Please see this link India’s Defence Budget 2012-13 | Institute for Defence Studies and Analyses
     
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  9. thakur_ritesh

    thakur_ritesh Administrator Administrator

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  10. DivineHeretic

    DivineHeretic Senior Member Senior Member

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    The ET has got its figures perfectly right. The original allocation for 2012-13 was Rs.1.93 lac crores, but under instructions from finance ministry, Rs.14,000crore was returned, thus reducing the actual expenditure to Rs.1,78,000 crore.
     
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  11. sob

    sob Moderator Moderator

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    Do not mix expenditure with Budget. Money which cannot be spend by any department is notionally taken off the expenditure list and is credited to the Finance Ministry.
    Lack of spending the allocated sum of money in no way reduces the Budget. This reduction in expenditure is done typically at the end of the 3rd Quarter or in January and is done with every department because the FM wants to show a healthy cash position at the start of the Fiscal Year.

    Rs. 1.93 Lakh crores was passed in the Finance Bill and will be the figure for the year. Planned expenditures can be reduced but risk of repeating myself the budgeted figures remain the same. Also please note every year bar the year of the Pay commission the MOD has to return the unused amount.
     
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  12. sob

    sob Moderator Moderator

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    Ritesh, this money could have been spent on many of the welfare activities for the soldiers, but in a way has been wasted.
     
  13. DivineHeretic

    DivineHeretic Senior Member Senior Member

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    My bad. Thanx for correcting me. This is what you get for sleeping through classes.
     
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  14. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Sumeet,

    They have messed it up completely, no way were they ever going to spend this money, and that too on welfare of the soldier, which is a low priority.

    He had to have a face saver amongst all this really, and the defence budget would have been targeted. Rest assured, with the way the things are lined up, he will do absolutely the same, as I said in another thread, let's take this figure of 2.03L cr as no more than 1.9 L cr, and capital outlay as 70,000cr because this is what will be targeted.

    One just has to look at how much the economic survey was propagated, 6.1-6.7% GDP growth rate next fiscal. They don't even want to talk about the current fiscal.
     
  15. WMD

    WMD Regular Member

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    last yr def. budget was of Rs. 1,93,407.29 Crores,
    some time ago the news of cutting in the defence budget by approx. 14000cr for this yr came out,
    so estimated def. budget was Rs 1,78,503 crore for this yr.
    if we take the initial reports of reduction in def. budget as true, then the no. make sense
     
  16. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Only in India does the MoD give money BACK to the FinMin. Can't they put the savings into a procurement account or are they afraid some babus will spend it on his mistress?
     
  17. WMD

    WMD Regular Member

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    Lowest Defence Budget increase in over 30 years
    SOURCE: EXPRESS NEWS SERVICE

    India will spend its lowest on defence expenditure in over three decades with several major modernisation projects set to be affected after the Union government proposed a modest hike in the annual Budget that amounts to just over 5 per cent over the last year.

    As the government scrambles to cut costs given the dismal growth rate, defence spending is one of the hardest hit with the projected Budget of Rs 2.03 lakh crore coming up to barely 1.79 per cent of the Gross Domestic Product. This is a record low for India in at least three decades, with the figure dropping considerably from 3.16 per cent of the GDP in 1987.

    The expenditure Budget has also revealed that the Defence Ministry suffered a Budget cut of over Rs 14,000 crore last year, a majority of which — over Rs 10,000 crore — had been marked for procurement of new defence systems.

    While Finance Minister P Chidambaram promised that extra funds will be made available for the defence of the nation if the need arises, the amount allocated for purchase of new equipment is marked as Rs 86,740 crore, an 8.2 per cent hike from last year.

    Modernisation of the naval fleet is set to be the hardest hit, with a cut of over 13 per cent from what was allocated last year, throwing questions on several acquisitions, including new generation conventional submarines.

    The modest hike is likely to hit the acquisition of air systems hard, given the large number of aircraft purchase proposals that have been floated by all three forces and the minimal hike proposed under this subhead in the Budget. The biggest being the multi-billion dollar contract to procure 126 new fighter aircraft for which French fighter Rafale has been shortlisted.

    The capital Budget for acquisition of new aircraft for the three forces is Rs 33,776 crore, a hike of just over Rs 1,000 crore from the last year. It remains to be seen whether this would cater to the first few payments that India will need to make if it signs the contract for the new generation of fighters. By conservative estimates, the first tranche of payments could come out to be over Rs 5,000 crore. The Army’s much delayed hunt for 197 new light helicopters to replace the Cheetah fleet also seems to be heading for a cancellation with the allocation for aircraft for the land force being cut drastically from Rs 3,052 crore in the last financial to Rs 1527 crore in the Budget, leaving minimal scope for new acquisitions.

    Despite the dismal Budget, Defence Minister A K Antony put up a brave front by saying it is the best possible, taking into account the “difficult economic situation both at home and abroad”. “Factoring the current economic scenario, he (Chidambaram) has been fair to the defence sector also by increasing the Budget and assuring that should there be any urgent need in future the same would be provided,” he said.

    However, as the records show, not only is this year’s allocation the lowest in over three decades in terms of ratio to the GDP, it is also the lowest in terms of percentage of the total annual government expenditure. This year’s defence budget is 12.23 per cent of the estimated spending of the government in the upcoming financial year, considerably down from the 15.79 per cent in 1999 as well as lower from last year’s 12.97 per cent.

    A surprise revelation in the Budget is that the Defence Ministry’s much valued funding for prototype manufacturing of defence systems under the ‘Make’ category of procurement has failed to make a mark. The Budget document indicates that none of the Rs 89 crore earmarked for prototype development was spent, forcing a cut in this year’s allocation to a symbolic Rs 1 crore.
     
  18. arnabmit

    arnabmit Homo Communis Indus Senior Member

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    Funds no problem but don’t waste money, Antony tells Indian Air Force | idrw.org

    The government is committed to the modernisation of the Indian Air Force (IAF) and funds are not a problem to ensure that it remains at the forefront of technology, Defence Minister AK Antony said on Tuesday while stressing the need to observe austerity measures.

    “Procurement and acquisitions span the entire spectrum of the capabilities of the IAF, including fighter aircraft, transport aircraft, helicopters and modernisation of the air defence network. Net centricity, cyber security and ensuring the requisite communication bandwidth for seamless operations too are a part of capacity-building to ensure that the IAF remains at the forefront of technology,” Antony said while inaugurating the Air Force Commanders’ Conference in Delhi.

    The theme of the conference was “Enhancement of Operational Infrastructure and Security”.

    Antony also stressed the need to strictly observe austerity measures while noting availability of funds would never be an issue.

    “Efforts must be made to cut down expenditure on non-core activities and avoidable ceremonial formalities. At the same time, I am sure all of you appreciate the need for indigenisation and move towards self-reliance in defence production. We must minimise the over-reliance of our armed forces in general and the IAF in particular on foreign original equipment manufacturers (OEMs) for procurement of major aircraft and equipment,” he said.

    Antony added that the long gestation periods of acquisitions, induction and operationalisation of these systems require that the IAF upgrades its legacy systems and modern systems to retain and strengthen its capabilities.

    Antony said the shortage of trainer aircraft has been an impediment in the training of aircrew.

    He expressed hope that induction of the basic trainer aircraft, the intermediate jet trainer and the Hawk Mk-132 advance jet trainer would enable meaningful training to the aircrew and also prepare them to handle complex avionics in modern aircraft.

    “The skill levels of other air warriors too must be similarly developed to enable them to retain and sharpen the cutting edge of the operational capability as well as adeptly handle other systems and structures in a net-centric environment,” he said.
     

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