The ministry of defence (MoD) is expecting a “routine increase” of seven to eight per cent in the forthcoming defence budget this year (for 2011-12) and is also confident of spending the entire capital expenditure amount earmarked (for military modernisation) in the budget tabled in 2010-11, top MoD sources have told this newspaper.
The defence budget for 2010-11 was `1,47,344 crores out of which `60,000 crores was earmarked for capital expenditure. Last year, about `7,000 crores of capital expenditure (out of the capital expenditure amount earmarked in 2009-10) was surrendered by the MoD as it was unspent. Money earmarked for capital expenditure is surrendered when the MoD is unable to utilise it in time for military equipment acquisitions. The MoD has been trying to quicken the pace of military modernisation and free it from the red-tapism that has often been associated in the past with the process.
“If you take figures of the last few years, the MoD has been doing a pretty good job in utilising most of the budget and the trend is a little better this year. We will utilise nearly all the budget (for defence capital expenditure) if not go over the budget this year,” top defence sources said.
“The government has been pretty generous with the MoD, saying that if it is necessary, as per the need, resources will be available. So we expect a routine increase of seven to eight percent (in the budget) every year,” sources added.
“The endeavour of the MoD in the past few years has been to ensure transparent and speedy process for acquisitions and the system has evolved very well and we are continuing to do improvements in the acquisition process and we are certain that transparency and proper accountability will be ensured while doing the acquisitions in a speedier manner,” sources said.
Last year, the government had announced only a modest hike of just under four per cent in the defence budget over the year previous to that when the budget was hiked by a whopping 34 per cent in the wake of the Mumbai terror attacks.
Of the `1,47,344 crores earmarked in 2010-11, the allocation for revenue expenditure (salaries) was for `87,344 crores while the allocation for capital expenditure (acquisition of weapon systems) was `60,000 crores.
The budget estimate for capital expenditure announced in 2009-10 was `54,824 crores.