Indian Army 'reeling' from fund crunch following poor Budget allocation, says Centre 'dashed our hopes'

New Delhi: The possibility of a two-front war is a "reality" and the current budget for the army does "little to contribute to this requirement", a top army official told a parliamentary panel, while the vice-chief of the Indian Army said that the latest Budget has "dashed our hopes".

As per a report by the Parliamentary Committee on Defence, headed by BJP MP Maj. Gen. BC Khanduri (retd), which comes at a time when India has witnessed a spurt in ceasefire violations along its border with Pakistan and a rise in tension along its border with China since the Doklam standoff, a representative of the army told the panel that the "threat perception" has been "ever increasing". In another report by the panel, vice-chief of the Indian Army Lt. Gen. Sarath Chand was quoted as saying that the Budget had "dashed our hopes" and may cause a "setback".

According to one of the seven reports by the parliamentary panel on defence tabled in the Lok Sabha on Tuesday, an army representative detailed the disturbances along India's eastern and western fronts.

Representational image. Reuters

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Mentioning the Doklam standoff, the officer said there is increased patrolling and transgressions by Chinese troops and increased activity in the Tibet plateau, where the quantum of troops and level of exercises have gone up. He also talked of the increasing cross-border firing along the Pakistan border, high number of civilian injuries and deaths, and Fidayeen attacks on army establishments.

The army official said modernisation of both Pakistani and Chinese forces is "going on in full swing".

"The possibility of a two-front war is a reality, and speaking about it, it is important that we are conscious of the issue and we pay attention to our modernisation and filling our deficiencies. More than ever, there is an increasing obligation to ensure that our nation cements its military capability and is recognised as a net security provider in the South Asia region," he said. "But, the current Budget does little to contribute to this requirement."

In another report, the vice-chief of Indian Army has said: "The Budget of 2018-19 has dashed our hopes and most of what has been achieved has actually received a little setback." Chand has said the "marginal increase" in the Budget estimates "barely accounts for inflation and does not even cater to the taxes".

"Allocation of Rs 21,338 crore for modernisation is insufficient even to cater to the committed payment of Rs 29,033 crore for 125 ongoing schemes, emergency procurements, and 10(I) (10 day intensive war), other DGOF requirements. Committed liabilities of 2017, which will also get passed on to 2018, will further accentuate the situation," he said.

"Typically, any modern armed force should have one-third of forces, one-third of its equipment in the vintage category, one-third in the current category and one-third in the state-of-the-art category. As far as we are concerned ... 68 percent of our equipment is in the vintage category, with just about 24 percent in the current and eight percent in the state-of-the-art category," Chand said.

He also said that "Make in India" is a great step taken by the Ministry of Defence towards development and self-reliance, but there is not enough money available for the army to take up projects. "We in the Army have identified as many as 25 projects for Make in India. However, there is not adequate Budget to support this," he said.

He added that projects like future-ready combat vehicles (FRCVs) and future infantry combat vehicles (FICVs) through these schemes may also get delayed due to the low allocation. "There is an overall shortfall of around Rs 12,296 crore as far as capital is concerned," the vice-chief of Indian Army said.

Discussing the revenue aspect of the Budget, a bulk of the 4.5 percent increase in the revenue allocation will go towards the pay increase due to the 7th Pay Commission. The balance leaves an increase of just over three percent which does not even cater to the inflationary requirements, one of the reports said. In addition to this, there is an additional burden of Rs 5,000 crore because of new taxation laws in Goods and Services Tax (GST), which has also not been taken care of in the latest Budget. To add to it, while financial power has been delegated to the vice-chief of army to spend around Rs 14,097 crore, there is no separate allocation for it.

The parliamentary panel has, meanwhile, rapped the government for low allocation to the army.

"In the Budget Estimates 2018-19, the total projection made by army (including Revenue and Capital Budget) is Rs 1,96,387.36 crore. The allocation made against this projection is Rs 1,53,875.22 crore. This amounts to a shortfall of Rs 42,512.14 crore or a 'budget deficit' of nearly 23 percent vis-a-vis the projection," the committee said.

"The current budget does not support the inevitable needs of the army. Considering the facts of the matter, the committee is of the view that providing adequate budgetary support is unavoidable," the panel observed.