Downturn may chip 25% off defence budget

The economic downturn is now eating into the nation’s weapons acquisitions programme, as the Centre is mulling an almost 25 per cent cut in the Rs 1,93,407 crore defence budget this fiscal year.

This could adversely affect the weapons acquisition plans for India’s 13-lakh strong armed forces. The 2012-13 capital expenditure on defence is Rs 79,579 crore, of which capital acquisition amounts to Rs 67,672.24 crore. After the cut, this could be reduced to about Rs 20,000 crore, officials say. This would be over and above the 10 per cent cut already effected in the revenue budget by the Finance Ministry under its austerity measures.

Many of the new, much anticipated acquisitions may therefore have to wait. The Rs 1,00,000-crore contract for 126 combat planes from France’s Dassault Aviation is being pushed to the next financial year. The artillery guns modernisation programme costing Rs 20,000 crore, and creation of new mountain corps on the Eastern sector to counter China by spending Rs 65,000 crore will be put on hold. However, the squeeze will not hit already-contracted acquisitions.

“Discussions are at present in progress between the Defence and Finance ministries over the likely cuts in the defence budget,” a Defence Ministry official in the know of the inter-ministerial talks told Express. In view of cost-cutting measures, the defence forces were asked by the ministry to prioritise procurements, the official said.

 In anticipation of these austerity measures, Defence Minister A K Antony told the armed forces to focus on purchases and projects affecting their operational readiness for the remaining part of the fiscal year.