The government allocated Rs 76,765 crore less to the Army, Navy and Air Force in the defence budget than what they had sought to purchase new weapons, aircraft, warships and other military hardware.
The three forces had demanded Rs 1.60 lakh crore as capital outlay but were granted Rs 83,434 crore for the year 2018-19, according to the details placed before the Lok Sabha today by Minister of State for Defence Subhash Bhamre.
In the revenue outlay, which covers payment of salary, maintenance of establishments and other related expenditure, the allocation was Rs 35,371 crore less than what was demanded.
Overall the three forces were given Rs 1.21 lakh crore less than what they had demanded.
The three forces were known to be unhappy over inadequate allocation of resources, particularly for buying new weapons and platforms when the challenges on the borders with China and Pakistan were growing.
Reflecting the Army's anguish, Vice Chief of Army Lt Gen Sarath Chand has told a Parliamentary panel that the funds given to the force for the next fiscal were insufficient to deal with various security challenges.
He said the Army was struggling to make emergency procurements when China and Pakistan were modernizing their defence forces in "full swing".
According to the details provided by Bhamre in the Lok Sabha while replying to a question, the Army was given Rs 17,756 crore less in the capital outlay and Rs 24,755 crore less under the revenue head than what was sought by it.
Similarly, the Navy's demand for capital outlay was Rs 37,932 crore, but it was given Rs 20,848 crore which was Rs 17,084 less than its demand.
Under capital outlay, the Indian Air Force was given Rs 41,924 crore less than what was demanded by the force.
The minister said that if required, the schemes will be reprioritised to ensure that urgent and critical capabilities of the three forces are acquired.
An outlay of Rs 2.95 lakh crore was set aside for the defence budget for the next fiscal.
The allocation, which was 1.58 per cent of the GDP, was the lowest since 1962 when India and China fought a war.
Chand had said the inadequate allocation of funds will hit the Army's modernisation plan when the Chinese military was competing to reach the level of the US.
He had said 68 per cent of the Army's equipment is in the "vintage category", and the fund crunch will also impact the serviceability of the existing equipment and may even affect payment of installments for past purchases.