India’s Navy Boosts Spending 74 Percent

Discussion in 'Indian Navy' started by JAYRAM, Mar 28, 2012.

  1. JAYRAM

    JAYRAM 2 STRIKE CORPS Senior Member

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    Mar. 26, 2012 - 11:43AM |
    By VIVEK RAGHUVANSHI


    Plans To Buy 46 Ships, Pay for Carrier


    NEW DELHI — The Indian Navy plans to boost spending by 74 percent in the next financial year to buy ships and submarines and to continue paying for its aircraft carrier.

    The Indian Navy has been allocated $4.77 billion, up from $2.74 billion last year. The increase comes amid an almost 18 percent hike in overall defense spending.

    Finance Minister Pranab Mukherjee announced the budget proposals March 16, saying allocations will hit 1.9 trillion rupees ($38.68 billion), 1.64 trillion rupees more than last year.

    The Navy is increasing its spending amid escalating costs for new ships and for the former Russian aircraft carrier Admiral Gorshkov. Last year, after nearly two years of haggling, the Navy agreed to pay $1.6 billion more than the carrier’s contract price of about $1 billion, an Indian Navy official said.

    Meanwhile, a jump in input costs, especially steel from Russia, has escalated costs for the Navy’s homegrown warship-building program, which in some cases has seen a fourfold increase among its programs. The French Scorpene submarine program has also seen costs go up by about $1 billion.

    The Navy is building 46 warships, including destroyers, stealth destroyers and frigates.

    State-owned Mazagon Dock Ltd. (MDL) is building three destroyers worth $3.5 billion under Project 15-A, and another four destroyers at a cost of about $3 billion.

    MDL and state-owned Garden Reach Shipbuilders and Engineers (GRSE) have been awarded the contract to build seven stealth frigates under Project 17-A at MDL worth $10 billion.

    GRSE is also building four corvettes for about $2.2 billion.

    However, India’s Ministry of Defence was unable to spend $611 million on weapons and equipment in the “capital” category because of delays in finalizing the helicopter and ultralight howitzer deal for the Indian Army. The money has been transferred to the next financial year.
    Neighborhood Trend

    India is increasing its defense spending while its neighbors do the same. Earlier this month, China upped spending by 11.2 percent to $106.4 billion, and last June, Pakistan set aside $5.75 billion for 2011-12, a raise of 12 percent.

    “India will have to further increase its defense spending to prepare itself to fight both Pakistan and China alongside,” said Nitin Mehta, a defense analyst here.

    The big-ticket defense items in the coming year include $11 billion to purchase new fighter jets, along with the purchase of a variety of helicopters worth more than $2.5 billion. In addition, India is spending $500 million on ultralight howitzers and homegrown missiles.

    The Army will spend $3.77 billion compared with $3.8 billion last year. The Air Force will spend $6 billion, up from $5.94 billion.

    The Navy plans to spend $10 billion to purchase seven follow-ons to its Shivalik-class frigates.

    The Navy is also expected to float an international tender for the purchase of six conventional submarines with air-independent propulsion technology, costing more than $11 billion.

    For defense research, the allocation is roughly $928 million, compared with $926 million last year. However, some of the projects marked as special do not get reflected in this budget, Mehta said.

    India imports nearly 70 percent of its weapons and equipment, and that figure is unlikely to come down in the next five years, when nearly $100 billion will be spent on new weapons and equipment, Mehta added.

    Delays in finalizing contracts because of bureaucratic problems continue to plague defense purchases, said Mahindra Singh, a retired Indian Army major general. Quicker finalization could save India money due to inflation and currency fluctuations, Singh said

    India’s Navy Boosts Spending 74 Percent | Defense News | defensenews.com
     
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  3. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    That seems like quite an unbalanced rise over a 17% average.
     

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