India’s financial woes have been so severe that the Ministry of Defense did not have enough money to pay the "first full instalment" of the $1.01 billion deal to buy six additional C-130J Super Hercules aircraft last December, the Times of India reports.
And with several nearly-finalized deals queued for the new government, the MoD has requested a 25% hike in budget. Besides the long-pending $20 billion MMRCA deal, procurements of 22 Apache attack helicopters (around $1.4 billion), 15 Chinook heavy-lift helicopters (around $1 billion), and 145 M-777 ultra-light howitzers ($885 million) will be on defense minister Arun Jaitley’s plate.
According to the interim budget for 2014-15, the defense outlay was set at $37 billion with $22 billion set aside for revenue expenditure while $15 billion for new weapons, sensors and platforms.
Prime Minister Narendra Modi is expected to make a decision on a wide range of issues, ranging from recommendations of the Naresh Chandra task force on higher defence reforms to the creation of three new tri-Service commands for space, cyber and special forces, according to the Times of India.
The action plan's underlying message, however, is that existing funds are proving grossly inadequate to ensure the country's war machinery is kept fighting fit, the report said. Leave alone the dwindling capital budget for new acquisitions, the defence establishment is "running quite short" of even revenue expenditure to "properly maintain" existing or new weapon systems with sufficient spares.
"The major chunk of the capital outlay is being eaten up by committed liabilities and instalments for earlier acquisitions. This backlog will continue for a few years. It has been made clear that either the budget should be hiked or the new acquisitions should be delayed," a source was quoted as saying by the newspaper.