If reports about the diversion of INR 13,000 crore from the capital segment of the defence budget to the revenue heads are true, it is an indication of the growing strain on the revenue budget.

There are speculations whether the present budget is sufficient to meet expenditure on big ticket items but one has to bear in mind that it is only the advance payment – generally 15% of the contract value – that becomes payable on signing of a new contract. Even if new contracts are signed for say INR 50,000 crore, MoD will require just about INR 7,500 crore for those schemes.

Ministry of Defence which accounts for 13-14 per cent of the central government expenditure, if one also takes into account the expenditure on defence pensions, could come under some pressure to prepare an action plan as the outcome of what it does is often intangible, undisclosable, or simply unmeasurable. The author puts forward some suggestions.

Following on Xi Jinping vision of ‘fight war, win war’, the Chinese military spending is shifting towards higher technology weapons and equipment and training and also illustrates its aim to institute reforms related to troop’s operational commands, organisation and training.

The 10 per cent growth in the interim defence budget although looks impressive from outside, it has a poor outlook on the modernisation front. Much of the hike in the interim budget is consumed by the increase in salary, leaving very little to meet the defence modernisation requirements.

Projecting a demand which cannot be met is as pointless as allocating budget that is barely sufficient to sustain the armed forces and other departments of the MoD. The persistent neglect of this aspect of defence management is taking its toll not only on the stock of ammunition held by the armed forces, notably the Army, but also on serviceability levels of the equipment.

It is commonly viewed that in an election year, the incumbent government is tempted to present a populist budget. In that scenario, the MoD would have reasons to be unhappy, particularly so when the modernisation requirement of the armed forces has reached a stage which is now contingent upon substantial additional resources to remain on course.