In March, the Parliamentary Standing Committee on Defence, headed by BJP MP Maj Gen (retd) BC Khanduri, had come down hard on the government for inadequate allocation of funds to the Army, Navy and the Air Force.
The Army had told the panel that it was reeling under a severe financial crunch and struggling to even make emergency procurements when China and Pakistan were carrying out modernisation of their defence forces in “full swing”.
The then Vice Chief of Army Staff Lt Gen Sarath Chand had told the parliamentary panel that inadequate allocation of funds in the defence budget for 2018-19 will hit the Army’s modernisation plan when Chinese military was competing to reach the level of the US.
He said 68% of the Army’s equipment is in the vintage category, adding that the fund crunch will also impact the serviceability of the existing equipment and may even affect payment of instalments for past purchases.
However, Sitharaman rejected reports of a shortage of ammunition in the armed forces and called Opposition allegations on the Rafale fighter jet deal “baseless”. She also said defence expenditure had always been rising and there was no paucity of funds.
She said the actual revenue expenditure of defence had run into lakhs of rupees with 2017-18 recording the highest at Rs 1,82,091.16 crore.
Responding to a question on the effectiveness of Ramzan ceasefire in Jammu-Kashmir in the wake of the recent incidents of terrorist attacks and stone-pelting on security forces, Sitharaman said, “When it is an unprovoked attack the Army was given the right to retaliate. We honour the ceasefire but of course, a margin was given to us when there is an unprovoked attack.” “Terror and talks cannot go hand in hand,” added Sitharaman.
While giving the reply to a question, the defence minister reeled out budget figures and said there had been no shortage of funds for the armed forces at all.
She said the capital outlay for defence services was Rs 94,587 crore in 2014-15, while the actual expenditure was Rs 81,886 crore. In 2015-16, capital outlay was Rs 94,588 crore, while the expenditure was Rs 79,958 crore. In 2016-17, capital outlay for the defence was Rs 86,340 crore and expenditure was Rs 86,370 crore.
She said the armed forces need to review their wishlist as new technology has come and some of the equipment they wanted may not be required now.
The government allocated Rs 76,765 crore less to the Army, Navy and Air Force in the defence budget than what they had been seeking to purchase new weapons, aircraft, warships and other military hardware, according to official figures. The three forces had demanded Rs 1.60 lakh crore as capital outlay but were granted Rs 83,434 crore for the year 2018-19.