The Ministry of Defence has sought an additional Rs 20,000 crore from the Centre to meet its capital and revenue budget needs.
The demand for additional money comes at a time when the face-off between Indian and Chinese troops in Doklam in Bhutan has entered the 8th week and the borders with Pakistan remain unusually active.
In 2017, the Government had allocated Rs 2,74,113 crore – about 1.62 per cent of the Gross Domestic Product – for defence sector. The annual allocation for defence in 2017 was just 6 per cent more than the previous years.
“Of the initial annual allocation about 50 per cent of Capital and more than one third of the Revenue budget has already been spent,” Defence Ministry sources told India Today.
A few weeks earlier, the Defence Ministry had allowed the Vice-Chief of Army Staff to make emergency purchases of ammunition, mines and spares that are considered crucial for war fighting. Delegating financial powers to the army was done to cut the red-tape and speed up purchases.
The Indian Army is required to be battle-ready to fight a 10-day short intense war. There are, however, gaps and Comptroller and Auditor General (CAG) of India too have raised the issue of shortage of ammunition and spares.
Early this year the custom duty exemption for imports made by the Defence Ministry was removed. “The ministry have had to pay large amount as customs duty,” a source said. The decision to remove the custom duty exemption was taken give a level playing field to domestic defence manufacturers.