Indian Military News, Reports, Data, etc.
- Thread starter bd popeye
- Start date
This is getting as bad as the SU-35 Chinese deal...on again off again...always wondering if it is actually going to happen.
And going on for years!
Good for the Indians.
It would be nice to see a new, high res pictures of the Arihant. something newer and more clear than these:
Defence allocation down to about 1.65 % of GDP, lowest since the 1962 China war
The defence allocation, at Rs 2,49,099 crore, was only marginally higher than last year's Budget Estimates of Rs 2,46,727 crore
Every finance minister, while presenting the Budget, pays tribute to the military. He announces the defence allocation for the coming year - normally 15-20 per cent higher than the previous year - and then promises that the government will make available whatever more is needed for defending the country.
This year, Finance Minister Arun Jaitley's speech did not make even a token mention of the government's highest chunk of expenditure. The defence allocation, at Rs 2,49,099 crore, was only marginally higher than last year's Budget Estimates of Rs 2,46,727 crore. From this year's Revised Estimates of Rs 2,24,636 crore, the allocation shows a raise of a little more than 10 per cent, well below defence inflation, which normally runs at 15 per cent annually.
The all-important capital head, under which new equipment is bought, spending has been flat for three years. In 2014-15, capital spending was Rs 81,887 crore; in the Revised Estimates Rs 2015-16, it has dropped to Rs 81,400 crore; and is expected to be only marginally higher at Rs 86,340 crore. That is only if the defence ministry manages to spend its entire capital allocation. In FY 2015-16, it will surrender Rs 13,188 crore, about 14 per cent of the allocation.
Meanwhile, revenue expenditure continues to rise. From Rs 1,43,236 crore in revised estimates of FY 2015-16, the allocation has been raised to Rs 1,62,759 crore, a hike of Rs 19,523 crore, or about 14 per cent. There is an apprehension that even this might not be enough, with the military facing a two-pronged pressure of growing manpower numbers and higher salaries when the Seventh Pay Commission is implemented.
In addition, the government will face financial pressure from implementing the One Rank, One Pension (OROP) award, although pensions are not included in the defence budget. From Rs 60,238 crore allocated for pensions in the Revised Estimates for the current year, FY 2016-17 will see Budget Estimates of Rs 82,333 crore - a rise of over 35 per cent.
Allocations for the three services on account of capital expenditure provide some indication of what contracts might be signed. The army is the big gainer, with its capital allocation up from Rs 18,486 crore to Rs 22,110 crore. This jump suggests the likelihood of artillery gun contracts being concluded, including the purchase of M777 ultralight howitzers from BAE Systems. The navy has been given a marginal raise, which suggests that its flow of new warships is likely to continue smoothly. Significantly, the Indian Air Force (IAF) allocations have been marginally reduced. This suggests the defence ministry is not expecting to sign a contract next year for the Rafale fighter - for which it would have to allocate about Rs 10,000 crore as the signing amount.
In terms of overall government spending, defence will consume about 12.6 per cent of the total spending, approximately the same as the current year's revised estimates. Defence is now down to about 1.65 per cent of gross domestic product, lowest since the 1962 war with China.
This continued downward trend indicates the government does not perceive any pressing national security threats, and has chosen to direct spending to social sectors instead.
Source:
The defence allocation, at Rs 2,49,099 crore, was only marginally higher than last year's Budget Estimates of Rs 2,46,727 crore
Every finance minister, while presenting the Budget, pays tribute to the military. He announces the defence allocation for the coming year - normally 15-20 per cent higher than the previous year - and then promises that the government will make available whatever more is needed for defending the country.
This year, Finance Minister Arun Jaitley's speech did not make even a token mention of the government's highest chunk of expenditure. The defence allocation, at Rs 2,49,099 crore, was only marginally higher than last year's Budget Estimates of Rs 2,46,727 crore. From this year's Revised Estimates of Rs 2,24,636 crore, the allocation shows a raise of a little more than 10 per cent, well below defence inflation, which normally runs at 15 per cent annually.
The all-important capital head, under which new equipment is bought, spending has been flat for three years. In 2014-15, capital spending was Rs 81,887 crore; in the Revised Estimates Rs 2015-16, it has dropped to Rs 81,400 crore; and is expected to be only marginally higher at Rs 86,340 crore. That is only if the defence ministry manages to spend its entire capital allocation. In FY 2015-16, it will surrender Rs 13,188 crore, about 14 per cent of the allocation.
Meanwhile, revenue expenditure continues to rise. From Rs 1,43,236 crore in revised estimates of FY 2015-16, the allocation has been raised to Rs 1,62,759 crore, a hike of Rs 19,523 crore, or about 14 per cent. There is an apprehension that even this might not be enough, with the military facing a two-pronged pressure of growing manpower numbers and higher salaries when the Seventh Pay Commission is implemented.
In addition, the government will face financial pressure from implementing the One Rank, One Pension (OROP) award, although pensions are not included in the defence budget. From Rs 60,238 crore allocated for pensions in the Revised Estimates for the current year, FY 2016-17 will see Budget Estimates of Rs 82,333 crore - a rise of over 35 per cent.
Allocations for the three services on account of capital expenditure provide some indication of what contracts might be signed. The army is the big gainer, with its capital allocation up from Rs 18,486 crore to Rs 22,110 crore. This jump suggests the likelihood of artillery gun contracts being concluded, including the purchase of M777 ultralight howitzers from BAE Systems. The navy has been given a marginal raise, which suggests that its flow of new warships is likely to continue smoothly. Significantly, the Indian Air Force (IAF) allocations have been marginally reduced. This suggests the defence ministry is not expecting to sign a contract next year for the Rafale fighter - for which it would have to allocate about Rs 10,000 crore as the signing amount.
In terms of overall government spending, defence will consume about 12.6 per cent of the total spending, approximately the same as the current year's revised estimates. Defence is now down to about 1.65 per cent of gross domestic product, lowest since the 1962 war with China.
This continued downward trend indicates the government does not perceive any pressing national security threats, and has chosen to direct spending to social sectors instead.
Source:
DEFENCE BUDGET: WHAT ARUN JAITLEY DIDN’T TELL YOU IN HIS SPEECH
India’s defence pensions have ballooned by 50% and the capital outlay has been slashed, with the Seventh Pay Commission’s fiscal impact looming large.
Developments over the last year have come with profound implications for India’s defence budget. However, finance minister Arun Jaitley did not bring up defence spending in his budget speech.
After a protracted crisis over One-Rank-One-Pension (OROP) for the armed forces, the government acceded to defence personnel demands, with some exceptions. Uncertainty has continued to plague India’s Rafale deal with France, and some green signals were given to the Indian army to raise an 80,000-strong mountain strike corps. The Seventh Pay Commission also imposes higher personnel costs, which affects the Indian army more than the other two services.
Overall, the defence budget estimate for 2016-17 is Rs3.4 trillion, about 10% more than the previous year’s budget estimate. This is broadly consistent with past increases.
However, what makes up this net increase is a radical departure from the past.
Thanks to OROP, the defence pensions budget has gone up by a whopping Rs27,800 crore from the previous year—a full 50% increase. This increase is just Rs2,000 crore short of the increase in the overall defence budget, making one wonder if all other expenditure increases have been frozen.
There is an accounting change this year which complicates the analysis, where it turns out the traditional defence demand for grants numbers 21 to 28 have been consolidated from eight items to four, numbered 20 to 23 in the FY16 budget.
It turns out that the armed forces’ revenue expenditure has gone up but the capital outlay has been slashed in turn. Revenue expenditure has increased by about Rs11,000 crore this year, amounting to an 8.6% increase between budget estimates. This excludes pensions but includes allocations toward the salaries and allowances of both serving personnel and civilian support staff, as well as fuel, consumables and other miscellaneous costs. The Indian army has the lion’s share of the revenue expenses, as its force strength is about nine times that of the Indian Air Force and Navy combined.
However, the budget does not take the Seventh Pay Commission recommendations into account—which will likely be accepted some time in the year.
Revenue expenses have increased by similar percentages in the past even when not accompanied by new pay commissions. Thus, one can expect significant new expenditures on salaries and on pensions that have not yet been allocated for.
Last year, the government had allocated close to Rs86,000 crore as capital outlay, and we learn now that this was revised down to Rs74,300 crore. The latest budget estimate is Rs78,586 crore on capital expenditure. While this is an increase over the previous revised estimate, the ministry of defence has consistently underspent the capital budget for the last several years, with the Indian army’s modernization efforts usually being the most hampered. It is a concern that the final expenditure on defence modernization and capital goods may be much lower than the latest estimate.
Defence modernization involves buying large equipment like tanks, ships and aircraft which are usually paid for in eight-year cycles or thereabout. This means that a large part of the defence modernization budget goes toward committed liabilities, with some budgetary space left for new acquisitions.
In each of the last three years, the defence ministry has been able to allocate less than 8% of the defence modernization budget for new defence acquisitions, with the rest of the budget being used for committed liabilities. Thanks to an increasing budget and high growth in the late-2000s, India was able to spend between 30% and 40% of its modernization budget on new acquisitions. This started falling from 2011, and in the last four years, the defence ministry has not allocated more than 9% of its modernization budget on new acquisitions. This may be insufficient for the Indian armed forces to maintain their technological edge.
It is unclear whether this pattern changes in 2016, but the prospects look unlikely. The only way by which the budget for new acquisitions rises significantly is if any large contractual payment cycles got completed last year. Until the parliamentary standing committee on defence publishes its reports this year, the Indian public will remain in the dark.
It is a seldom asked question whether the Indian Army could do with fewer soldiers while providing the same level of security and defence. Even the Chinese People’s Liberation Army has begun rationalizing force strengths in recent years. The cost of implementing OROP and the Seventh Pay Commission recommendations must trigger a fundamental rethink on how India’s armed forces are organized and paid for.
DETAILS EMERGING OF DEFENCE BUDGET HIKED BY NEARLY TEN PER CENT
The defence budget was today increased by 9.76 per cent to Rs 2.58 lakh crore for the next fiscal as compared to the revised estimates of Rs 2.33 lakh crore for 2015-16 even as military pension zoomed to Rs 82,000 crore mainly due to the One Rank One Pension scheme.
The capital outlay for the three services, for modernisation, stood at Rs 78,586.68 crore.
However, Finance Minister Arun Jaitley made no mention of the defence allocation for 2016-17 in his Budget speech.
The defence budget accounts for nearly 17.2 per cent of the total central government expenditure for the year 2016-17 which is Rs 19.78 lakh crore. This includes the pension budget along with the defence budget.
The highest jump has been in the pension expenses. While the revised estimate for the current fiscal was Rs 60,238 crore, it has jumped to Rs 82,332.66 crore for the coming financial year.
In comparison, there has been a marginal increase of Rs 4287.07 crore in the capital expenditure of the three services which are in the process of modernisining their equipment.
One reason for small hike could be that the Defence Ministry was unable to utilise the full capital budget for the current fiscal.
The budget comes at a time when the three services are in the last stages of negotiations for multi-billion dollar deals for Rafale fighter jets, Apache, Chinook and Kamov helicopters and the M777 light weight howitzers.
Incidentally, the total value of these projects exceeds the capital outplay. "The payments are done in a phased manner and no payment is paid in full," defence sources said.
According to defence sources, 86 deals worth approximately Rs 1,50,000 crore are close to the final stage of approval.
Defence Minister Manohar Parrikar had recently directed all concerned to make concerted efforts to get these deals cleared in the next 4-5 months within the first quarter of the next fiscal.
India has once again emerged as the world's largest importer of arms, with Russia being the top supplier garnering 70 per cent of the Indian market.
India's imports, accounting for 14 per cent of global arms imports, were three times greater than those of China and Pakistan in teh period 2011-15.
India has once again emerged as the world's largest importer of arms, with Russia being the top supplier garnering 70 per cent of the Indian market.
India's imports, accounting for 14 per cent of global arms imports, were three times greater than those of China and Pakistan in teh period 2011-15.
The defence budget was today increased by 9.76 per cent to Rs 2.58 lakh crore for the next fiscal as compared to the revised estimates of Rs 2.33 lakh crore for 2015-16 even as military pension zoomed to Rs 82,000 crore mainly due to the One Rank One Pension scheme.
The capital outlay for the three services, for modernisation, stood at Rs 78,586.68 crore.
However, Finance Minister Arun Jaitley made no mention of the defence allocation for 2016-17 in his Budget speech.
The defence budget accounts for nearly 17.2 per cent of the total central government expenditure for the year 2016-17 which is Rs 19.78 lakh crore. This includes the pension budget along with the defence budget.
The highest jump has been in the pension expenses. While the revised estimate for the current fiscal was Rs 60,238 crore, it has jumped to Rs 82,332.66 crore for the coming financial year.
In comparison, there has been a marginal increase of Rs 4287.07 crore in the capital expenditure of the three services which are in the process of modernisining their equipment.
One reason for small hike could be that the Defence Ministry was unable to utilise the full capital budget for the current fiscal.
The budget comes at a time when the three services are in the last stages of negotiations for multi-billion dollar deals for Rafale fighter jets, Apache, Chinook and Kamov helicopters and the M777 light weight howitzers.
Incidentally, the total value of these projects exceeds the capital outplay. "The payments are done in a phased manner and no payment is paid in full," defence sources said.
According to defence sources, 86 deals worth approximately Rs 1,50,000 crore are close to the final stage of approval.
Defence Minister Manohar Parrikar had recently directed all concerned to make concerted efforts to get these deals cleared in the next 4-5 months within the first quarter of the next fiscal.
India has once again emerged as the world's largest importer of arms, with Russia being the top supplier garnering 70 per cent of the Indian market.
India's imports, accounting for 14 per cent of global arms imports, were three times greater than those of China and Pakistan in teh period 2011-15.
India has once again emerged as the world's largest importer of arms, with Russia being the top supplier garnering 70 per cent of the Indian market.
India's imports, accounting for 14 per cent of global arms imports, were three times greater than those of China and Pakistan in teh period 2011-15.