Cash crunch? Who cares? It's shopping time for defence ministry

Notwithstanding the financial constraints, the defence ministry has been on a drive to procure and upgrade military assets over the last five years for which it spent a whopping amount of Rs 3.25 lakh crore.

The ministry procured and upgraded a large number of military equipment for the armed forces including nuclear submarines, special operations transport aircraft and fighter planes, utilising its full allocation of funds and reversing the earlier trend of shortfall in utilisation, sources said.

This year too, the ministry has already spent 82 per cent of capital acquisition budget of around Rs 80,000 crore and is slated to fully utilise its allocation. Altogether, the ministry spent Rs 3.25 lakh crore (around $55 billion) over the last five years on procurement and upgradation of military assets.

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The procurements included those of 10 C-17 heavylift and 12 C-130J transport aircraft, 12 P-8I anti-submarine warfare planes, Akula-II class nuclear submarine (on lease) and Su-30MKI aircraft.

Besides, the money was spent on developing the indigenous LCA Tejas for the IAF and upgradation of 51 Mirage-2000 combat planes.

In 2009-10, the ministry spent Rs 51,112 crore which was 106 per cent of the funds allotted to it whereas in the next fiscal, it spent Rs 62,056 crore, which was 102 per cent of the allocation, the sources said.

In 2011-12 and 2012-13 also, the ministry continued this trend by spending over Rs 1.38 lakh crore, which was more than 102 per cent of the modernisation budget, they said

For the present fiscal, the defence ministry was allocated Rs 2.03 lakh crore, of which around Rs 80,000 crore were to be spent on modernisation.

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So far, 82 per cent of the funds has already been spent and in the next few weeks, the remaining amount would also be spent, sources said.

A number of procurements are in the pipeline, some in final stages, and are expected to materialise in months down the line. These include 22 Apache combat choppers, 15 Chinook heavylift helicopters and the 126 Rafale combat aircraft deal.

The defence ministry is also in advance stage of negotiating the Fifth Generation Fighter Aircraft programme with Russia, on which it is expected to spend around Rs 1.5 lakh crore in next 10-15 years.

It is also in the process of issuing tender for the around Rs 60,000 crore deal for procuring six large conventional diesel electric submarines for the navy.

The ministry has been seeking additional amount of Rs 40,000 crore since last year but this has been turned down in view of the economic slowdown, the sources said. In view of the defence scams in which foreign firms were involved, the defence ministry has also worked towards promoting indigenisation in defence sector for which it made a major procurement policy change by making import of weapon systems as the last option for the three Services.

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