A K Antony: Defence budget spiked by global financial crisis
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The ministry of defence will have no big hike in the next defence budget due to global financial meltdown, says the government.
The defence minister A K Antony on Wednesday announced at the Aero India 2013 that, "the government is passing through a difficult phase, the recession is affecting us. There will be a cut in the capital and revenue budget. However, we will not cut the expenditure on operational preparedness."
He added that India being one of the world's biggest spenders on defence equipment will be slashing defence imports in the coming fiscal year and increase the focus more on indigenization weapons.
New Delhi has earmarked $36.35 billion for defense for the current fiscal, of this, 795.79 billion rupees will be spent on buying new weapons.
As reported by FE recently, with the defence capital acquisitions budget being slashed by around Rs 10,870 crore — several critical procurement projects have come to a halt. They range from acquisition of submarines and howitzers to missiles and helicopters.
The two biggest projects facing huge delays are the over $10 billion one for six new-generation conventional submarines and the almost $10.4 billion 126 MMRCA (medium multi-role combat aircraft) project.
The submarine proposal, dubbed Project-75 India, has been in the making for several years now. But the MoD is yet to even issue the global tender or RFP (request for proposal) to kick off the formal process.
The inking of the contract for the gigantic MMRCA project itself has been put off till the next fiscal due to the budget cut. The Ministry of Finance had recently conveyed to the defence ministry that there would be a cut of around Rs 10,000 plus crore in the Rs 1.93 lakh crore allocated for the defence sector, ministry officials said in New Delhi.