India’s defence spend doubled in the past five years

In keeping with the government’s commitment to modernisation of the forces, India spent around Rs140,000 crore on defence purchase in the past five years. The amount is almost double the money spent on capital acquisitions in the previous five years.

A senior official in the ministry of defence (MoD) said the three services entered into 465 contracts worth over Rs135,000 crore in the past three years alone.

The official said there was a steady increase in funds being committed to modernisation and this was evident from the fact that in 2004-09, MoD spent Rs137,496 crore on capital acquisitions. In the five years before that, i.e. during 1999-2004, the total capital acquisitions were worth only Rs62,672 crore.

If the trend of the past five years is anything to go by, India could end up spending almost Rs850,000 crore on defence deals in the decade starting this year.

The capital expenditure, however, is only 39% of the defence budget. The defence budget of Rs141,703 crore this fiscal was a 23.65% increase over the revised budget estimates of last year.

The MoD official said the government, which has been returning thousands of crores annually because of delay in procurements, was confident of spending the entire capital allocation this year.

According to the defence expenditure review committee, which looked into MoD’s spending methods and suggested several reforms in its recently-submitted report, the drawbacks in the acquisition process resulted in the three services wasting the opportunity to utilise Rs42,691 crore between 2000-01 and 2007-08.

But this year has been different. MoD has already spent 35.99% of its capital outlay in the first six months. The corresponding figure for last financial year was 13.65%.