Defence Minister Ask to Expedite Spending Capital Budget for the Indian Armed Forces

Armed forces have so far seen an unusually slow pace of spending their capital budgets for 202122, even as the fiscal year ends in just over two months. The military has spent the smallest part – about 40% – of its capital budget for the current fiscal year, while the Indian Air Force (IAF) spent about 70%.

The Navy spent the highest of the three services at about 90% of its capital expenditures. While actual capital expenditures for the services from the previous year have yet to be disclosed, sources said expenditures for all three services were significantly higher than for the current year.

The weakness of defense budget spending is an aberration because we learn that the services have projected investment budget needs well above what they allocated in 202122. The defense budget is divided into four main headings – defense of expenses, capital expenses (for new acquisitions and modernization of large tickets), income (for small acquisitions of spare parts, maintenance costs), and miscellaneous, which include various administrative expenses.

Last week, Defense Minister Rajnath Singh held a meeting of senior defense officials to take stock of overall spending so far, as well as to review the services’ progress in meeting defense targets.

local procurement expenses. “He has asked the services to accelerate the spending of their capital budgets as soon as possible so that the maximum amount can be spent by the end of the fiscal year in March,” a defense source told. The source said the defense minister also stressed that the services should try to meet their internal spending targets allocated from the capital budget.

This year, it was allocated at 64% over the current financial year, compared to 58% the previous year. The overall defense budget for 202122 is Rs 4.78 lakh crore, of which the capital budget is Rs 1.35 lakh crore. Capital expenditure for the Army in the current financial year was Rs 36,000 crore, for the Navy Rs 33,000 and for the IAF Rs 58,000 crore.

Multiple sources in all three reports told that the main reason for the low spending was the Covid19 pandemic, as a result of which many contracts failed to materialize and the deliveries have been delayed.

“This was particularly true for Aboriginal equipment produced by the defense UAP,” said the second source of defense “. Delivery and delayed contracts had a waterfall effect on payments. Only the milestones of payment were