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By Bulbul Singh

01 Mar 07. India will spend $21.8bn on defence which constitutes 14 per cent of her total budget of $154.5bn for the next financial year April, 2007-March 31, 2008. Defence spending for the next year is a marginal hike of 7 per cent compared to the financial year 2006-2007 spending of $20.2bn.

The budget allocation falls short of the demand of the defence forces which had been demanding a spending of over 3 per cent of the Gross Domestic Product [GDP] on defence unlike the current level of spending of less then 2.5 per cent of GDP.

A senior Indian Army official said, the budget allocation will not leave any room for programs like C4I, and network centric warfare system for the Army, Navy and the Indian Air Force.

The irony of the Indian defence spending is that in the year 2006-2007, which is still running, the Indian defence ministry has returned $682m as unspent money meant for purchasing fresh weaponry. A defence ministry official explained that the unspent money was due to non-finalization of major programs like purchase of 197 Army helicopters, 155 mm guns for the army, and other programs for which money was allocated in the 2006-2007 budget but could not be spent. Money has now been again allocated in the next financial budget for the next financial year.

Though the total defence budget is $21.8bn in real terms India is spending much more as defence spending does not include pensions for the defence forces, and spending on the establishment of the Indian defence ministry. If this were to be included then the total spending for 2007-08 works out to $25.8bn. A defence ministry official explained that in case this spending on pension is taken into account then the total budget will work out to more then 3 per cent of the GDP. India has excluded Defence pensions from Defence Expenditure since 1985.

Nearly 43 per cent of the budget at $9.5bn has been earmarked for purchasing fresh weaponry and equipment from overseas and domestic sources. The Indian Air Force receives the largest share at $3.78bn for buying new weaponry and equipment. The Indian Air Force’s buying list includes 126 Medium Range Multirole Combat Aircraft, rotary Unmanned Aerial Vehicles, 40 Russian Sukhoi aircraft, additional air refuelers, additional 80 Mi-17 medium lift helicopters, up gradation of Mirage 2000-H and MiG 29 fleet and the purchase of advanced missiles and precision guided ammunition. Money is paid in several instalments for purchase of weaponry and equipment and as such not all the money is funded in one budget.

The Indian Army gets only $2.5bn to buy new equipment. It has to buy 155 mm artillery guns, which are long-overdue said, an Indian Army official, air defence system, 197 helicopters, purchase of a quick reaction surface-to-air missile system, anti-tank guided missiles, tactical communication system, software defined radio sets, Russian Igla missiles for T-90 tanks, additional T-90 tanks, high mobility vehicles, armoured recovery vehicles, nigh vision devices, new generation carbine systems, bullet proof jackets, hand held thermal imaging systems, and upgrades of T-72 tanks, Shilka air defence system, L-70 air defence system.

The Indian Navy gets $2.3bn under the Capital account head for buying fresh equipment and its wish list includes purchase of additional warships, stealth frigates, anti submarine warfare helicopters, submarines, and UAVs.

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