Defence Budget may see 4-5% cut

Last Updated: Wed, Jan 16, 2013 07:06 hrs

New Delhi: After monthly meetings and much haggling between the finance ministry and the three services, the defence Budget for 2013-14 is likely to see a four-five per cent cut, in the range of Rs 7,600-9,600 crore.

The last of the meetings is slated for the end of this month.

Top defence sources said the defence forces had been asked to postpone the creation of the Strike Corps and payments for the French Rafale fighter to next year.

"We said we understand: these are hard times. We're still better off than several other arms of the government. Ministries have been asked to cut back as much as 10 per cent," said a senior army officer. He added the three services could not cut pay and allowances or salaries under the broad head of revenue expenditure. That left only capital and modernisation expenditure. New projects, he said, were being given a short shrift.

It was around this time a year ago that French aircraft manufacturers Dassault were awarded the contract to supply 126 medium multi-role combat aircraft to the Indian Air Force.

The Strike Corps for high altitude areas was to be raised over five years at a cost of Rs 60,000 crore. This has been scaled down to Rs 20,000 crore. There may be only a token allocation for this in the 2013-14 Budget, said the sources.

Budget 2012-13 raised the defence outlays to Rs 1,93,407 crore, growth of 17.6 per cent over the previous year's outlay — one of the highest increases in recent years.

However, utilisation of Budget outlay is an issue. Amit Cowshish of the Institute of Defence Studies and Analyses said: "According to the Controller General of Accounts, the total expenditure against the Budgetary allocation of Rs 1.93 lakh crore stood at 44 per cent at the end of October 2012. This respectable level has been achieved because of the revenue expenditure, which stood at 50 per cent, compensating for the slow progress of capital expenditure, which had reached only 35 per cent of the capital budget at the end of the second quarter of the year."

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