Calculations reveal that the capital expenditure has been cut primarily to accommodate the rise in salary and pension bills arising out of the implementation of OROP scheme and the Seventh Central Pay Commission recommendations.

It is time India devised appropriate tactics to meet the current threat. It is imperative that the armed forces prepare for ‘the most likely scenario’ rather than ‘the worst case scenario’. But to be fair, this can only be done when there exists a clear national military policy/strategy.

The defence budget for the next fiscal has been completely restructured, making it difficult to make like-to-like comparisons. The growth in the defence budget is bound to disappoint the strategic community, notwithstanding the economic factors that may be responsible for it

The underutilisation of allocated funds suggest that the meagre funds available in the modernisation budget after catering for committed liabilities have not been fully utilised. Thus, a thorough introspection for better expenditure management is needed.

The MoD Order mentions that the IFAs are expected to give due attention to macro- management issues, highlighting the need for them to be involved in the planning and plan-review process. These are laudable objectives, but a well-knit mechanism for their implementation does not seem to exist at present.

It is a fairly simple exercise to estimate what the defence budget will be given available indicators. My assessment is that the Budget Estimate for defence is likely to be around Rs. 250,000 crore, with 105,000 crore for Capital Expenditure and 145,000 Crore for Revenue Expenditure.

The bad news in this year’s defence budget is that it does not recognise that things are not going in the right direction but only the beaten track. And the poor track record in fully utilising the resources allocated for ‘Modernisation’ is the worse news.