February 06, 2013
Credit: Credit: Boeing
India is trimming defense spending for its current fiscal year, which ends March 31, but Defense Minister A.K. Antony says spending on operational preparedness will not suffer.
“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,” Antony said Feb. 6 at the kickoff of the 9th Aero India exposition in Bengaluru.
For the current fiscal year, the Indian government has cut defense spending by about 5% from the allocated 1.93 trillion rupees ($38.6 billion), mainly due to the ongoing economic downturn.
Under the allocated 1.93 trillion rupees for 2012-2013, 1.13 trillion rupees have gone to revenue expenditures including salaries and pensions, and 795.79 billion rupees were earmarked for modernizing the armed forces by acquiring new assets.
Several key acquisition plans are expected to be pushed into the next fiscal year.
The decision to prune capital acquisitions by 100 billion rupees ($1.85 billion) comes at a time when India has announced several large defense acquisition projects, including the more than $20 billion effort to acquire 126 Rafale fighters from France’s Dassault, and a program to buy Apache and Chinook helicopters from Boeing.
“Some acquisitions due this fiscal [year] will be put off to next fiscal as we have to tighten our belt to the extent possible for a better future,” Antony says. “Budget cuts are not limited to our ministry but across ministries.”
India’s planned defense modernization will maintain its pace, “mainly because of the situation around us and the emerging volatile security scene,” he adds. “The respective forces would decide their priorities.”
The government wants to complete acquiring the Rafale fighters for the Indian air force as soon as possible. The government has been negotiating the purchase details with Dassault Aviation, and this process cannot be cut short, he notes.