THE PANEL SAID IT FAILS TO UNDERSTAND WHY THE AMOUNT ALLOCATED UNDER CAPITAL BUDGET DOES NOT EVEN FULFIL DEFENCE MINISTRY’S OBLIGATIONS TOWARDS COMMITTED LIABILITIES.
NEWDELHI: A parliamentary panel has slammed the government for inadequate allocation of capital budget for the Army, Navy and the Indian Air Force and took strong objection to the Finance Ministry’s reluctance to create a non-lapsable fund for defence expenditure.
In a report tabled in Lok Sabha, the Standing Committee on Defence said though the Defence Ministry projected a requirement of ₹1.72 lakh crore under capital budget for 2018, only ₹ 93,982 crore was allocated by the Ministry of Finance.
“The allocation under capital budget not only fell far short of projections by Ministry of Defence, but the allocation does not even cover committed liabilities,” it said.
The Committee said it fails to understand the reasons behind the allocation where the amount allocated under capital budget does not even fulfil the Defence Ministry’s obligations towards committed liabilities.
The panel, headed by BJP MP Kalraj Mishra, also criticised the Finance Ministry for its reluctance to create a ‘Non-Lapsable Capital Fund’ for defence forces. Under current norms, the unspent budget allocation goes back to the Finance Ministry.
It has been a long-pending demand of the armed forces that unspent funds be kept in a non-lapsable pool so that capital acquisition can be made using it.
“The very fact that the allocation of resources under Capital Budget for the year 2018-19 (Budget Estimate) which is not even sufficient to cover committed liabilities leaving alone new projects and other capital requirements strengthens the Committee’s case for creation of such a fund,” it said.
The committee said in 2018-19, the shortfall was ₹17,756 crore for the Army, ₹15,691 crore for the Navy and ₹41,924 crore for the Air Force.
It also noted the submission by the Vice Chief of Army Staff before the committee earlier this year that the marginal increase in capital budget allocation for Army had dashed hopes for modernisation. “The Committee were particularly alarmed to note from his oral evidence that although the Ministry of Defence had delegated financial powers up to ₹14,097 crore to the VCOAS towards security related issues, there was no separate allocation for this in the Capital Budget allocation in 2018-19,” it said.
“Hence, the ministry is left with no other option but to reduce resources for security of military stations or compromise on other acquisitions.”