Defence allocation needs a big boost. Is the FinMin listening?

A continuing standoff with China along the Line of Actual Control (LAC) requires Finance Minister Nirmala Sitharaman to make substantial allocation for defence modernization in this Union Budget.

The defence sector is in urgent need of attention to fast track big deals pending because of fund crunch. All the three wings – Army, Navy and Air Force – need latest transport, fighter aircraft, new warships, helicopters, artillery guns, assault rifles, snipers submarines, and more.

Last year’s (2020-21) Union Budget hiked the defence allocation by about 6 percent with the total defence budget standing at Rs 4.7 lakh crore.

More spending on infrastructure and health

Sitharaman, the former Defence Minister, may be keen to meet the defence department’s requirements, but an economy hit by the COVID pandemic will require substantial investments in infrastructure and health on top priority.

Therefore, the Ministry of Defence’s demand for a rollover budget may get overlooked on Monday February 1) when Finance Minister Sitharaman will present the Union Budget 2021-22.

It is not that the 2020-21 Union budget was very encouraging for the defence department. The Modi government hiked the allocation by just 1.82% to Rs 3.37 lakh crore. As a consequence, the military had to slash its procurement and modernisation targets for want of funds.

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The Army’s capital budget rose by 3% only to Rs 3,400 crore over the 2019-20 estimates. The budgetary allocation for Indian Air Force, which is in the process of upgrading its fighter aircraft fleet, was reduced from Rs 44,869.14 crore to Rs 43,281.91 crore.

On one hand, the Centre talks about a big boost to the defence sector by divulging its plan to spend $130 billion to strengthen armed forces in the next five to seven years. While on the other hand, all the three defence wings have had to cut down on its modernisation plans due to budgetary constraints.

The China challenge

The Navy, IAF and Army had to make emergency procurements since India’s faceoff with China started in April last year. Modernization of the defence sector is a must because China looks determined to keep the border row alive. Since China is militarily as well as economically stronger than India, the Finance Minister needs to hike india’s defence budget to keep pace with the changes in military warfares.

The Chinese military is on an expansion mode. So the Indian defence department needs to modernise and for this money is important.

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Atma Nirbhar Bharat

Despite, the gloomy picture, the defence sector will see an increase in allocation.  Since restrictions on imports, the country may stay focused on indigenous procurements to make India ‘Atma Nirbhar’ or self-reliant in defence sector.

The defence allocations will focus on procuring 114 fighters for the air force, P 75I class submarines for Indian Navy, carrier-based fighters, armed UAVs, artillery modernisation for the army etc.