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By Bulbul Singh

16 May 12. Indian Defence Ministry is making a case to seek further hike in defence spending in the next financial year 2012-13 from the allocated amount of $38.6 billion. Sources say the hike would be to the tune of around $10 billion and will be used to raise additional troops along the China border.

The Indian Defence Ministry is already making a case to be put up before the Indian Finance Ministry a case for additional funds to the tune of over $10 billion over and above the funds approved this month for defence spending. The exercise for the demand for additional funds will be completed in the next one to two months ,said sources in the Indian defence ministry.

The demand for additional funds comes at a time when the economic condition of India is not looking very rosy as the current and fiscal account deficit is rising beyond expectations putting pressure on the Indian Rupee. The fall of Indian Rupee against the U.S. dollar has eroded purchase power for overseas weapons by more than 20 per cent.

Apart from the rise in U.S. dollar against the Indian Rupee, impacting purchasing power for the Indian defence ministry, India is planning to raise additional troops and equipment along the China border. The plan includes putting up an additional offensive Corps in the Indian Army along the China border which would mean raising around 40,000 additional troops. Arming these additional offensive troops with weapons and equipment would entail extra cost. The Indian defence ministry is also making a case to increase defence from 2 per cent of (Gross) Domestic Product) GDP to around 2.6 per cent of GDP.

The additional funds are needed because India needs to prepare to fight both China and Pakistan alongside and as such there is increase in threat perception. Threat perception today is not similar to the threat perception a decade ago said a senior Indian Army officer while explaining the need for additional funds. The Indian Parliament this month approved a defence spending budget of $38.7 billion for the financial year 2012-2013. The Indian Navy had received the highest hike in spending. The Indian Navy is procuring assets, including littoral warfare assets and has to pay for additional warships which are begin decommissioned at a faster rate than being added. The Indian Navy is finding it difficult to maintain the current fleet strength of 140 warships as the rate of scrapping old warships is faster than the rate at which new ships are being added.

The Indian Navy is building 46 warships, including stealth and frigates under various programs which include building of destroyers, stealth destroyers and stealth frigates at Indian shipyards. The Indian Army failed to spend all the money allocated to it last financial year as some defence projects were not cleared for contract. The Indian Army could not spend $600 million rupees allocated last year mainly because the helicopter deal for buying 197 light utility helicopters could not be finalize and the purchase of 145 Light Utility Howitzer guns from U.S. subsidiary of BAE Systems could not be finalized due to procedural delays said an official of the Indian Army. The Indian Army plans to buy variety of military vehicles, air defence systems, variety of Howitzer guns and helicopters. The purchase of guns from BAE Systems has now been cleared by the government. The additional funds being sought will be spent for boosting the network centric warfare system of the defence forces in addition to buying additional weapons and equipment to be deployed along the China border.

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