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Rahul Singh, Hindustan Times
Yelahanka Air Base, February 07, 2013
At a time when India’s national security is under scrutiny, defence minister AK Antony on Wednesday said the country will be forced to cut down on military spending in 2013-14 due to a bleak economic outlook. His statements were echoed by finance minister P Chidambaram. The announcement comes not long after the nation was outraged over the killing of two Indian soldiers. One of them was beheaded by Pakistani troops inside Indian territory along the Line of Control on January 8.

Antony said the armed forces had been asked to prioritise their requirements against the backdrop of a cut in allocation for defence in the forthcoming budget. The minister, however, emphasised that the operational readiness of the armed forces would not be compromised.http://www.hindustantimes.com/Images/Popup/2013/2/07_02_pg1b.jpg

“We are in the process of prioritising military purchases. The service chiefs will take a call on what is critical for operational preparedness… We want more money, but we are not insulated from the global recession,” Antony said shortly after inaugurating Aero India 2013 — India’s biggest aerospace show — outside Bangalore.

Chidambaram, who was speaking in Delhi, obliquely admitted that a cut in defence expenditure is likely in the forthcoming budget.

“We must give more money for defence, but then we must have the money,” Chidambaram said. "So the R10,000 crore, which is reportedly being cut... you will know what is being cut only when the budget is presented… If it is cut for this year, it is cut; you cannot do anything about it. That money you cannot have. Can it be provided next year? We can, provided we can grow at a higher rate and we have more money."

This is the first time in recent years that the armed forces are facing such a financial crunch. Last year, the finance ministry turned down the military’s demand for an additional outlay of R45,000 crore over and above the defence outlay of R1.93 lakh crore for 2012-13. This was followed by the budget being cut by R10,000 crore.

Antony had sought the additional R45,000 crore from the Centre in May 2012, factoring in "changed threat perception" — an euphemism for the possibility of China and Pakistan ganging up against India. On Wednesday, too, he flagged concerns over Pakistan handing over the Gwadar port to China.

The looming budget cut implies India’s defence spending will remain less than 2% of the GDP for the second straight year, at a time when experts are arguing that it should be more than 3%, seen against the backdrop of China’s rising military might.

(With inputs from Delhi)