The money owed to the Navy and the Air Force in the temporary Budget is not sufficient to even fund the payments the forces have previously committed to make in 2019-'20. The shortfall has left defense staff worried about capability increase and transformation efforts.
The Budget, obtainable in Parliament on February 1, had allocated Rs 3.01 lakh crore to the three defense forces – including Rs 1.03 lakh crore for capital expenses.
"The Services have conveyed their concerns to the defense ministry," an anonymous ministry official said. "Defence Minister Nirmala Sitharaman is taking up the substance with the Finance Ministry to address it."
"Either we are owed more funds later in the year, or we need to cut down on spending somewhere else if we have to meet all liabilities that we have agreed on," an unidentified senior naval officer said.
The Indian Navy has been owed Rs 22,227 crore for capital expenditure, but its committed liabilities in 2019-'20 is Rs 25,461 crore. The Air Force has committed to paying Rs 47,413 crore this year but has been allocated Rs 39,347 crore. The commitments comprise the payments for Rafale fighter jets from France.
The Army's capital allocation will, however, be enough to fund its committed liabilities – it has got Rs 29,700 crore and has to pay Rs 21,600 crore. But it is predictable to fall short on its non-salary revenue expenditure. The total projected expenditure is even larger – Rs 36,000 crore for the Army, Rs 35,714 crore for the Navy and Rs 74,895 crore for the Air Force.
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Amit Cowshish, a former chief financial adviser to the ministry, told that "rolling over dedicated liabilities happens, but is not a healthy practice".
"Importantly, it reflects inadequately on the country," he said. "It is a very difficult position to be in. Not as long as for committed liabilities didn't happen in the past. Importantly, the allocation of additional funds is unlikely to go up later in the year."
