Indian Air Force Lists Russian S-400 Air Defense System as Top Priority

The Indian Air Force (IAF) has told the parliamentary panel on defense that the procurement of the S-400 air defense system developed by Russia holds prime importance in its efforts to tackle possible threats from China and Pakistan.

“Requirement of fighter aircraft is our first priority. Next is the long-range SAM S-400 system for which we have bet. That would substantially change our posture both towards northern adversary as well as towards western adversary,” reads the statement put forth by the IAF before the Parliamentary panel for defense.

The parliamentary panel, on its part, has recommended that funds towards the procurement of S-400 systems be made during the year as per the demand by the IAF.

India and Russia have been working on the final commercial contract since October 2016, when the two sides concluded an intergovernmental agreement for the procurement of five S-400 systems and four stealth frigates by India.Defense sources told Sputnik that negotiations are at the final stage now and the commercial contract is expected to be signed sometime soon. There are speculations that the Moscow visit by Defense Minister Nirmala Sitharaman later this month could see the deal finally coming through.

The S-400 systems are capable of intercepting and destroying airborne threats at a distance of up to 250 miles and can simultaneously engage up to six targets. Each S-400 comprises tracking and search radar systems, eight launchers, 112 guided missiles, and command and support vehicles.

China was the first global customer of the S-400. The world’s most potent air defense system was delivered by Moscow to Beijing last year. Russia is also expected to begin implementing the contract on the delivery of S-400 systems to Turkey in early 2020.

Meanwhile, apart from the attempt to conclude the impending S-400 air defense system deal, Sitharaman is also expecting to move forward the discussions on the proposed bilateral collaboration on the development of a fifth generation fighter aircraft (FGFA).

 Sputnik

HAL misses LCA Tejas' delivery target, mounting worries for IAF

At a time when the Indian Air Force (IAF)'s shrinking squadron strength has emerged as a major problem, the Hindustan Aeronautics Limited (HAL) has missed its delivery target of Tejas light combat aircraft (LCA) for the year's first quarter, said reports. This is a major worry as IAF is already down to 31 squadrons of fighter aircrafts against an authorisation of 42. To fight a two-front war, the IAF needs the optimum strength of 42-plus squadrons.

According to a Hindustan Times report, HAL has delivered only six LCAs to the IAF, missing its target of supplying 20 aircraft by the end of the year's first quarter.

"We are not getting as many jets as we would like. By now the first Tejas squadron should have inducted 20 planes...Six planes can hardly be called a squadron," the HT report quoted a person familiar with the Tejas program as saying. Tejas is a single-seat, single-jet engine, a multirole light fighter designed by the Aeronautical Development Agency (ADA) and Hindustan Aeronautics Limited (HAL).

 The cost of operating a single-engine fighter is lesser than that of a double-engine fighter. IAF is also looking at indigenously developed Tejas fighter aircraft to increase its squadron strength. [IAF denies showing interest in fighter jet F-35's procurement] Sometime back, reports had emerged that the Indian Air Force (IAF) was showing interest in Lockheed Martin's F-35 Lightning II fighter jet. The Lockheed Martin F-35 Lightning II is a family of single-seat, single-engine, all-weather stealth multirole fighters. 

The fifth-generation combat aircraft is designed to perform a ground attack and air superiority missions. But on March 1, Air Chief Marshal BS Dhanoa rubbished the reports and said that no such "request been made to the Americans." Timeline of developments regarding Tejas' induction in IAF: In March 2005, the IAF placed an order for 20 aircraft, with a similar purchase of another 20 aircraft to follow. All 40 were to be equipped with the F404-GE-IN20 engine. In December 2006, a 14-member "LCA Induction Team" was formed at Bangalore to prepare the Tejas for service and assist with its induction into service. 

On 25 April 2007, the first Limited Series Production (LSP-1) Tejas performed its maiden flight, achieving a speed of Mach 1.1. In December 2009, the government-sanctioned ₹8,000 crore to begin production of the fighter for the Indian Air Force and Indian Navy. On 10 January 2011, IOC, allowing IAF pilots to fly the Tejas, was awarded by then Defence Minister A K Antony to Chief of Air Staff Air Chief Marshal P V Naik. HAL was instructed by the Indian government to strictly adhere to deadlines to ensure Initial Operational Clearance-II by the end of 2013 and Final Operational Clearance (FOC) by the end of 2014. On 20 December 2013, the IOC-II was issued, after which the aircraft was cleared to be flown by regular IAF pilots and begin induction into squadron service. 

 The Final Operational Clearance (FOC) campaign began in December 2013, with three aircraft from Tejas flight-line successfully completing advanced weapon trials. In May 2015, the Mark I aircraft was criticized by the Comptroller and Auditor General of India (CAG) for not meeting IAF requirements. In October 2015, IAF Air Chief Marshal Arup Raha confirmed that the air force had ordered 120 (six squadrons) of Tejas Mark 1A, triple the 40 aircraft it had previously committed to buying. 

On 26 February 2016, Defence Minister Manohar Parrikar said in the Lok Sabha that the Indian Air Force will accept three to four Tejas this year and stand up a total of eight squadrons in eight years. In November 2017, it was reported that the Indian Air Force told the government that the Tejas is inadequate for the single-engined fighter program with insufficient flight endurance, smaller payload capacity, increased maintenance hours, and higher costs for maintenance compared to other contender aircraft. In February 2018, refuelling of Tejas with the engine running-known as "hot refuelling"-was carried out. 

 

OneIndia News

India to Fulfill Most of Its Fighter Jet Shortfall With Home-Grown Tejas

This is being considered a major setback by global manufacturers like Lockheed Martin and Saab, which have been aggressively trying to market their aircraft F-16 and Gripen-E, respectively, to India for the last two years.

New Delhi (Sputnik) — The Indian Air Force (IAF) has committed to buying a total of 324 locally developed fighter aircraft, including 201 upgraded versions of the Tejas. India's state-owned Defence Research & Development Organisation (DRDO) has asked the government to sanction an additional fund of $123 million for the upgraded versions of the Tejas fight jets, which have been upgraded with modern avionics.

"As of now, we have got the orders for about 123 aircraft and also the Air Force is committed to take another 201 aircraft," Dr. S. Christopher, the DRDO chairman said before a parliamentary panel.

The Indian defense ministry has also informed the parliamentary panel on behalf of the armed forces that the indigenously developed aircraft is compatible with present and future conflict requirements of India's armed forces.

"Tejas would form an important component of a viable air-defense system efficiently and cost-effectively. With Final Operational Clearance (FOC) features of Air to Air refueling, Derby and Python missile integrated, the LCA is expected to be a true air superiority air defense weapon of war. Light, agile and maneuverable," the Indian defense ministry acknowledged before the parliamentary panel.

Earlier on March 3, Defense Minister Nirmala Sitharaman had made it clear that her ministry will provide a decisive push to the homegrown Tejas for the Indian Air Force.

"There is a sense of urgency (to ramp up Tejas' production), more so because we have to sell it to countries," Sitharaman had said on March 3.

Presently, IAF is struggling to find financial resources to meet the requirements of aircraft, air defense systems and other critical assets due to a persistent shortfall in the budget by India's Ministry of Finance. For the year 2018-19, an estimated $17.61 billion is required by the IAF for making urgent purchases, while the allocation is only $10.1 billion.

"The shortfall in the budget will lead to the inability to procure spares and fuel. It will also impact maintenance and training of fleet and serviceability. Besides this pace of modernization will be a challenge," an IAF official informed the parliamentary panel.

 sputniknews

‘Repeated delays in naval projects led to huge cost escalation’

Repeated delays in key naval projects have not only hit country’s maritime preparedness, but also led to huge cost escalation. Three important naval projects, which were to cost Rs. 9,892 crore, eventually cost the Navy Rs 38,855 crore—four times the original cost.
Highlighting the delays in naval projects, the Standing Committee on Defence, headed by Major General B.C. Khanduri (retd), in its report tabled in the Parliament on Tuesday, claimed that repeated delays in procurement projects have become ‘part and parcel of the procedures’.
While mentioning about considerable delays in number of projects of the Navy, including Indigenous Aircraft Carrier (IAC), naval offshore patrol vessels, fast interceptor crafts, landing craft utility and water jet fast attack craft, the parliamentary panel observed that ” the delays have adversely impacted the exchequer.
In case of IAC, the delivery schedule of the aircraft carrier has been been revised from December 2010 to October 2018. But, the warship is expected to be delivered by October 2020. The panel noted that the main reasons for time overrun are the non-availability of Russian steel, and delay in receipt of critical pre-launch equipment such as gear box and diesel generators.
“The original coast of Rs. 3,261 crore was revised to Rs. 19,341 crore by the Cabinet Committee on Security in July 2014. Increased equipment costs, including weapons and sensors, and Aviation Facilities Complex (AFC) due to finalisation from generic to specific equipment has further added to the cost overrun,” the Standing Committee report stated.
After commissioning 40,000 tons warship, the IAC will be formally named as INS Vikrant. With this, India will join the elite group of indigenous built aircraft carrier, as other than Indian Navy, only the US, Russia, Britain and France have capacity to design and build aircraft carriers of 40,000 Similarly, in case of Project 15A with MDL, Mumbai, delivery of three ships named INS Kolkata, INS Kochi and INS Chennai, faced repeated delays. The committee observed that “the original cost of Rs. 3580 crore was revised to Rs. 11,662 crore. Cost overrun has been mainly due to the increase in equipment cost and Yard material, increase of cost of labour and labour overheads and realistic assessment of cost of weapons and sensors.”
And in case of Project 28 with M/s GRSE, Kolkata, delivery schedule of three ships—INS Kamrota, INS Kadmatt and INS Kiltan—was revised repeatedly, which led to cost overrun from Rs. 3,051.2 crore to Rs. 78,52.39 crore.

“The Committee are distressed to note that factors relating to costing are not assessed and calculated well in advance. To the dismay of the Committee, apart from the required capability not being handed over to the navy, the cost incurred on the project turned to a complete waste,” the panel observed.
The Committee recommended that due care be taken in concluding contracts and added that regular follow ups are an inescapable necessity. Otherwise, the precious funds of the exchequer will continue to keep going in vain, the committee stated.

 -defenceupdate

After Doklam humiliation, China deploys massive number of fighter jets, troops in Tibet

After the Doklam humiliation, China is flexing its military muscles in the Tibet Autonomous Region (TAR) near the Line of Actual Control (LAC) by deploying massive number of fighter jets and troops.

China increased its air defence capability along the LAC in February and is maintaining a high level of alertness along the LAC. According to a recent intel report seen by India Today, the People's Liberation Army (PLA) has deployed 13 more Mi-17 helicopters, which has both transport and gunship versions, and 10 fighter jets in Hoping, 22 copters and 11 fighter aircraft in Gangga. The Lhasa Gonggar Airport is the largest airport in Tibet supporting the capital city of Lhasa. The recent Chinese action clearly show that China is enhancing the fighting capability of its air force in Tibet.

The PLA has deployed eight Shenyang J-11 and nine Chengdu J-7 fighter jets at Kashi airfield, 39 fighter jets in Hatan, eight copters at Sule helibase in Tibet and nine Xian JH-7 fighter aircraft, three J-11s, four J-7s and two Shenyang J-8s combat planes and five Shaanxi Y-8 transport planes at Dingxin airfield. Besides, Beijing has constructed seven hangars at Pangta airfield. Besides the six fully operational dual-use airbases facing India at Lhasa Gonggar, Nyingchi, Qamdo, Hoping, Ngari Gunsa and Shigatse, the PLA has built another nine in TAR.

China keeps an eye on Indian security forces

China is also using its BeiDou Navigation Satellite System near Brutse, in Aksai Chin, 10 km from LAC to watch Indian security forces. China plans to increase the number of satellites under the BeiDou Navigation Satellite System from 30 to 35 by the end of 2020, sources said.

Defence expert Lieutenant General (retired) Raj Kadyan told India Today that India needs to be on guard. "Following the face-off at Doklam, China is trying to create tension by deploying fighter planes. India should be prepared to counter any possible Chinese threat in Doklam and the LAC. China will never forget the Doklam humiliation. It will attempt a similar mischief."

Kadyan added that China considers India its adversary in the region. "Talks of India joining the US, Australia and Japan to counter the Chinese influence in the Asia-Pacific didn't go down well with Beijing."

Psychological warfare on India

Another defence expert and Major General (retired) PK Sehgal sees the Chinese action as a massive psychological warfare on India. "China can take military action as well. We can't ignore this threat; we should be militarily prepared. China is an expansionist power," he said.

Sehgal also pointed to the numerical strength of the Chinese Air Force and how India faces a bigger threat, in case, of a war with both China and Pakistan. "China has 60 squadrons and Pakistan 25-it means a combined threat of 85 squadrons. India has only 32 squadrons as against the minimum requirement of 42. Eleven of our squadrons have old MiG-21s and MiG-27. Therefore, our effective strength is reduced to half."

China is also much ahead of India in terms of missile quantity and quality. "The only danger to China is from India's BrahMos supersonic cruise missile, which has a range of 290 km. Only the Russian S-400 missile can counter the BrahMos, but China lacks it. But India doesn't have enough BrahMos to deploy both in central and eastern sectors in case of a conflict."

 indiatoday

Army vice chief criticises “insufficient” budget before Parliament committee

Expressing grave concern at the “insufficient” allocation of funds for new weaponry, a top army general has told Parliament’s Standing Committee on Defence (hereafter “the Committee”) that the budget announced on February 1 “has dashed our hopes”.

A draft report by the Committee on Defence that Business Standard has reviewed notes that the army has been allocated just Rs 26,816 crore ($4.14 billion) for equipment modernisation against the Rs 44,573 crore ($6.88 billion) it had projected. That is barely 60 per cent of its request.

The navy’s and air force’s capital budget requests were slashed even more drastically. Against Rs 35,695 crore ($5.5 billion) the navy projected, it has been allocated Rs 20,004 crore ($3.1 billion), just 56 per cent of its requirement. The worst hit is the air force, which was allocated Rs 35,770 crore ($5.52 billion) against its projection of Rs 77,695 crore ($12 billion), barely 45 per cent of its needs.

Services capital budget: requests versus demands

(Rupees crore)

Head	2016-17		2017-18		2018-19
	Projected	Allocated	Projected	Allocated	Projected	Allocated
Army	37,960	17,206	42,486	25,246	44,573	26,816
Navy	30,223	12,614	27,546	18,604	35,695	20,004
IAF	41,266	23,770	62,049	33,570	77,695	35,770

(Source: Draft report of Parliament Standing Committee on Defence)

The defence committee is chaired by Major General BC Khanduri (Retired) and includes 21 Lok Sabha and eight Rajya Sabha members. These include heavyweights like former prime minister HD Devegowda, Murli Manohar Joshi, Kalraj Mishra, Ambika Soni and Subramanian Swamy.

 

Deposing before them, the army’s vice chief, Lieutenant General Sarath Chand, said “the marginal increase in BE (budgetary estimates) barely accounts for inflation and does not even cater for the taxes.” Chand was apparently referring to the new Goods and Services Tax (GST), which has placed an added load on the defence budget.

Typically, the three services submit their projections in the third quarter of each year, for which they add up “committed liabilities” (annual instalments due on purchases previously made) and “new schemes”, for which the calculate the first instalment on new acquisitions likely in the coming year.

But Chand deposed before the Committee that the army’s capital allocation this year “is insufficient even to cater for committed payment of Rs 29,033 crore ($4.48 billion) for 125 on-going schemes, emergency procurements, 10(I) (or the urgent procurement of ammunition for 10 days of intense war) and other DGOF (director general ordnance factory) requirements.”

Further, Chand stated: “Committed liabilities of 2017 which will also get passed on to 2018 will further accentuate the situation… [and] will hardly leave any funds for new schemes in 2018-19.”

This is of serious concern, he said, given the state of army equipment. “Typically, any modern Armed Force (sic) should have one-third of forces, one-third of its equipment in the vintage category, one-third in the current category and one-third in the state of the art category. As far as we are concerned, the state today is 68 per cent of our equipment is in the vintage category, with just about 24 per cent in the current, and eight per cent in the state of the art category”, Chand told the Committee.

The army’s vice chief stated that, leave alone fresh capital acquisition, the prime minister’s vision of “Make in India”, which focused on greater indigenisation, would be badly affected. “We in the army have identified as many as 25 projects for Make in India. However, there is not adequate Budget to support this. As a result of which, many of these may end up foreclosed”, said Chand.

High value and prestigious projects to indigenously develop a Future Ready Combat Vehicle (FRCV) and a Future Infantry Combat Vehicle (FICV) were also likely to be scuppered by a lack of funds. Chand said “with the kind of Budget that has been allocated, this may get delayed by a few years. I am not sure what is going to be their future.”

The pared down capital allocations this year are not a one-off case. A summary of previous years’ projections and actual allocations illustrates that this has been the pattern of the past as well.

As in previous years, the Committee has called on the government to remedy the situation. The draft report notes: “The Committee opine that keeping in view the likely cost escalation due to inflation, [the increase over last year’s budget] is quite minimal to meet requirements of Capital acquisition and other works planned for 2018-19. Therefore, the Committee would like the Ministry of Defence to strongly put its case before the Ministry of Finance for adequate allocation of funds, commensurate with the requirement of Modernisation and acquisition plans for 2018-19 (sic).”

 

 ajaishukla

India eying Boeing's Super Hornet in latest twist to air force procurement

(Reuters) - Boeing Co, considered the frontrunner in the race to supply the Indian navy with new fighter jets, is now in contention for a much bigger $15 billion order after the government abruptly asked the air force to consider the twin-engine planes.

Until recently, Lockheed Martin Corp’s F-16 and Saab AB’s Gripen were in a two-horse race supply at least 100 single-engine jets to build up the Indian Air Force’s fast-depleting combat fleet.

Both had offered to build the planes in India in collaboration with local companies as part of Prime Minister Narendra Modi’s drive to build a domestic industrial base and cut back on arms imports.

But last month the government asked the air force to open up the competition to twin-engine aircraft and to evaluate Boeing’s F/A-18 Super Hornet, a defense ministry source said. That jet is a finalist for the Indian navy’s $8 billion to $9 billion contract for 57 fighters.

The defense ministry plans to within weeks issue a request for information (RFI), the first stage of a procurement process, for a fighter to be built in India. The competition will be open to both single and twin-engine jets, the official said, but both Lockheed and Saab said they had not been informed about the new requirements.

The latest change of heart is a major opportunity for Boeing, whose only foreign Super Hornet customer so far is the Royal Australian Air Force.

It also illustrates how dysfunctional the weapons procurement process and arms industry are in the world’s second-most-populous country. The need for new fighters has been known for nearly 15 years, but after many announcements, twists and turns, the country’s air force has only three-quarters of the aircraft it needs.

An indigenous light combat aircraft, the Tejas, is still not operational, 35 years after it was first proposed.  

An Indian Air Force source said fighter procurement was urgent: the branch’s operational strength has fallen to just 33 squadrons, its weakest level in four decades, as it decommissions Soviet-era MiG-21s.

“The IAF wants the RFI issued within weeks and get the process started,” said the source, who declined to be identified because he was not authorized to speak to the media. “The problem is that government keeps shifting what it wants.” 

A PRESSING NEED

Over the next decade, 13 more squadrons will be retired as their aircraft age out of service, parliament’s standing committee on defense said in a December report.

The defense ministry declined to comment on the air force’s aircraft modernization program, saying it was not in a position to do so.

Lockheed, which had offered to shift its F-16 production line in Fort Worth, Texas, to India, said it had not been told of any change to the Indian plan for single-engine fighters.

“Our proposed F-16 partnership with India stands firm,” the company said in an email. Last year it picked Tata Advanced Systems as its local partner and said it was in talks with dozens of firms to build up the supplier network.

“The Government of India has not yet issued formal requirements but we are continuing to support government-to-government discussions and engage with Indian companies about F-16 industrial opportunities,” Lockheed said.

Sweden’s Saab was also caught off guard.

“We have seen the reports in the Indian media, but no new formal communication has been made to us regarding the fighter program,” said Rob Hewson, Saab Asia Pacific’s head of communications.

France’s Dassault Systemes SE’s Rafale, the Eurofighter Typhoon and Russian aircraft are also potential contenders under the new requirements, the air force source and industry analysts said.

An order the size of India’s is rare. The only comparable opportunity for the Super Hornet is Canada’s request for 88 fighters, which could be worth as much as $14.6 billion.

The Indian air force competition has echoes of a 2007 tender for 126 medium multi-role combat aircraft, which the Rafale won. But negotiations quickly bogged down over local production and prices, and in the end, the government ordered just 36 of the planes in 2016 for $8.7 billion.

LOCAL FIGHTER

The air force ideally would like a combination of lighter single-engine and twin-engine jets, as well as stealthy aircraft, but cannot afford such a range of foreign systems, analysts said.

A twin-engine foreign fighter would perhaps offer the best value while the Tejas finishes development, they said.

India’s annual defense capital procurement budget of $14 billion to $15 billion has to be spread over the army, navy, air force and the indigenous defense research organization.  

“The operational costs are going up with increased manpower, higher wages and general inflation. Ministry of Defence doesn’t have the luxury to go for too many platforms despite the rapidly falling squadron strength of the air force,” said Amber Dubey, partner and India head of aerospace and defense at global consultancy KPMG.

Boeing India President Pratyush Kumar said the company was ready to respond to any request from the air force.

“We will follow the MoD’s lead on their process and will be responsive to their needs if we are asked to provide any information,” he said.

Kumar said Boeing was committed to building the planes in India and had offered to help with India’s plans to develop its own advanced medium combat aircraft.

But the experience with the Rafale contract has made experts skeptical that the latest tender will proceed as planned.

Richard A. Bitzinger, visiting senior fellow at Singapore’s S.Rajaratnam School of International Studies, said he did not expect a resolution in even the next two to three years.

“I am never surprised by what the Indians do when it comes to their procurement tenders. They are constantly changing the rules, changing their minds, and often even cancelling orders mid-way through,” he said.

“The Indians have a remarkable knack for snatching defeat from the jaws of victory.”

India is Big Brother in Region, Not China, Asserts Maldives

Asserting its 'India First' policy, the Maldivian government on Tuesday claimed that as far as it was concerned, India is its big brother in Asia.

“We have an India first policy and we believe that India is the big brother in the region, not China,” said Mohammed Shainee, Minister of Fisheries and Agriculture. She is also the chairperson of the all-party talks committee.

The statement was made in the presence of other senior Maldivian ministers, including Mohamed Saeed who is the Minister of Economics development, Aishath Azima Shakoor who is the Minister of Legal Affairs, and Moosa Zameer, the Minister of tourism.

The statements were made in the President's office in the capital Male in the first international press conference hosted by the island nation this year.

“India will always be our best friend. India need not be threatened by Maldives,” Shainee said.

The ministers claimed that Maldives was concerned about China only when it came to Chinese investments in the island nation. Commenting on the alleged debt trap with regards to the One Belt One Road (OBOR) initiative, the ministers said it was absolutely certain that there would be no such trap and that it would pay back every penny with the revenue it earns from the investment.

Shainee also tried to allay concerns about Chinese militarisation of Maldives, claiming that "no matter what anybody says or suggests" Maldives will not be militarised and that nobody should be worried about it.

As far the ongoing emergency was concerned, the minister of legal affairs, Shakoor, said that it will not be extended beyond March 23.

The Maldivian government imposed emergency on February 5 for 15 days, and extended it by 30 days on February 20. The emergency gives security forces in the island nation wide-ranging powers to arrest suspected opposition members, prohibit public gatherings and impose travel restrictions. India, China, the US, the UK and Australia are among the countries that have issued travel advisories warning against non-essential travel to the islands.

India has been particularly concerned about developments in Maldives because China is looking to occupy India's place in being the primary player and associate of the tiny Island country. India had three decades ago militarily intervened and ended a coup restoring democracy in the country.

Both India and China have been keenly following the developments in Maldives for the past few weeks. While China has invested millions of dollars in the country through its OBOR projects, India is looking not to lose its strategic grip in the area. Tensions between both countries have risen since emergency was imposed in the state and both countries are said to have put their warships in standby mode.

news18

China's new super weapon against India: Neighbourhood debt traps

Wary of a resurgent and assertive India, China is not just adding to its military power; it has found an innovative way to contain India which seeks bigger influence in the region. This new weapon is a financial ploy that helps China grab land in India's neighbouring countries so as it can effectively ring fence India. Chinese President Xi Jinping’s mega Belt and Road Initiative (BRI) is a plan to deploy this weapon which analysts call "debt trap".

Center for Global Development, a think-tank based in Washington, D.C., has warned in a recent report that debt traps created by China through BRI would increase India's political cost to deal with such neighbouring states. The report said that eight countries including Maldives, in India’s neighbourhood, and Djibouti, which hosts the lone Chinese military base overseas, are particularly at risk of debt distress based on an identified pipeline of project lending associated with BRI.

China's strategy to grab land in smaller, less-developed countries is simple: it gives them loans on high rates for infrastructural projects, acquires equity into projects, and when the country is unable to repay the loan, it gets ownership of the project and the land. It can put this land to strategic use against India.

Sri Lanka is an apt example. It has signed a $1.1 billion deal with China for control and development of the deep-sea port of Hambantota. A state-run Chinese company will have a 99-year lease on the port and about 15,000 acres for building an industrial zone. In the past few years, China gave Sri Lanka big loans to build infrastructure. Now, Sri Lanka is unable to repay those loans.

It is leasing out land to China to repay its loans. Part of the money it gets by leasing out the Hambantota port will go into repayment of Chinese loans. This is how China sneaks into a country on the back of costly loans.

A similar story is unfolding in Maldives too. Pakistan and Nepal, too, run the risk of falling into the Chinese debt trap.

The think tank says BRI debt traps would have larger impact too. BRI raises the risk of debt distress for 68 countries identified as potential borrowers if the programme follows Chinese practices for infrastructure financing, which often entail lending to sovereign borrowers, says the report.

BRI is planned to span at least 68 countries with an announced investment as high as $8 trillion for a vast network of transportation, energy and telecommunications infrastructure linking Europe, Africa and Asia, the report said. The programme is an infrastructure financing initiative for a large part of the global economy that will also serve key economic, foreign policy and security objectives for the Chinese government, it said.

"Yet, important questions arise on sustainable financing of the initiative within BRI countries, and how the Chinese government will position itself on debt sustainability… And when the creditor itself is a sovereign, or has official ties to a sovereign as do China’s policy banks—China Development Bank (CDB), the Export-Import Bank of China (China Exim Bank), and the Agricultural Development Bank of China (ADBC)—these challenges often affect the bilateral relationship between the two governments,” the report said.

"It remains unclear the degree to which BRI, a Chinese-led bilateral initiative that seeks to employ some multilateral mechanisms to achieve its financing goals, will be guided by multilateral standards on debt sustainability," said the report.

economictimes

Defence Budget Dashed Our Modernisation Hopes, May End 25 'Make in India' Projects: Army Vice-chief to Parliamentary Panel

Vice Chief of Army Staff, Lt Gen Sarath Chand, on Tuesday deposed to the Parliamentary Panel on Defence that Budget 2018-19 had “dashed our hopes” of adequate modernisation of the force.

The marginal increase in the defence budget only accounted for inflation, he said.

“The Budget 2018-19 has dashed our hopes and most of what has been achieved has actually received a little setback,” Chand told the panel.


This may end in the foreclosure of 25 ‘Make in India’ Defence projects that are currently in the pipeline, he added.

Moreover, he said that the committed liabilities of 2017 will now pass over into 2018. “Allocation of Rs 21,388 crore foe modernisation is insufficient even to cater for committed payments of Rs 29.033 crore for 125 ongoing schemes, emergency procurement and other requirements,” Chand told the parliamentary panel.

He said Armed Forces has “hardly any funds” for modernization in 2019, with 68 percent of the Army’s equipment of vintage category and only 8 percent in the “state of the art” category.

He also raised concerns over the future of Future Ready Combat Vehicles. According to the Army, there was a shortage of Rs 12,296 crore in the capital budget of the Ministry of Defence. “We have no choice but to leave out some priority acquisition cases. 63% of Army budget goes in to paying salaries, 14% for modernization. We need 20-25% of Army Budget for modernization,” he said.

The parliamentary panel expressed alarmed by Chand’s statement, saying that they were aghast to note this dismal scenario. Allocation for services have to be suitably enhanced, they said

The budget for the Ministry of Defence was estimated at Rs 2.95 lakh crores, which does not include the budget for Defence Pensions.

The total defence outlay of Rs. 2.94 lakh crore is a hike of 7.81% compared to the allocation made to the MoD last year. While this was an increase from last year and was 12.1% of the Central government’s total expenditure, the defence budget’s share of the GDP is the lowest it has ever been since the 1962 war between India and China.

In the 2018-19 Union Budget, the amount of Rs. 2.95 lakh crore works out to around 1.58% of India’s Gross Domestic Product (GDP). The last time the share of defence in the GDP was lower than this was in the 1962 Union Budget, when a war had broken out between India and China in October. Following the war, the share of defence in the GDP was increased from 1.5% to 2.31% in the 1963 Union Budget.

Of the total defence Outlay, Rs. 1.95 lakh crore was allocated for revenue expenditure (which includes day-to-day expenditures of the armed forces) and Rs. 99,500 lakh crore was allocated for capital expenditure (which includes capital expenditure and modernization). The Defence Capital expenditure is up from Rs. 86, 529 crores. This is an increase of Rs. 13,000 crores, which gives the armed forces some more leeway to modernize its ageing equipment.

The Defence Pension, which is over and above the defence budget, was pegged at Rs. 1.08 lakh crore. This is the first time India will spend more on pensions than it will on capital expenditure. Moreover, this is also the first time the pension amount has breached the Rs. 1 lakh crore mark. This is a whopping rise of 26.6% from the Rs. 85,740 crore allocated for Defence Pensions last year.

 news18

Indian defence forces out of funds, won't sustain 10-day war, says Parliament Standing Committee

Parliament Standing Committee has said in its report that the Indian Army, Air Force and Navy does not have enough funds to buy new weapons systems required to fight a 10 day intense war, pay for liabilities already committed to or meet its recurring expenditures.

Deposing before the committee of the Parliament, the Vice Chief of Army Staff Sarath Chand has said, "Funds allocated is insufficient and the army is finding it difficult to even stock arms, ammunition, spares for 10 day intensive war. All the three services are expected to be prepared for at least 10 days of intense battle."

General Chand has told the committee that allocation of Rs 21,338 crore for modernisation is insufficient. Paying for liabilities carried over the previous year 2017 will hardly leave any funds for new schemes (acquisition of new weapon systems) in 2018-19.


ARMY ::

Recently, to cut the red-tape and speed-up the process of acquisition the government has allowed the Vice-Chief of Army Staff make emergency purchases of Rs 14,000 crore.

Shockingly, the committee found that no separate allocation was made in this regard. The money has to be allocated from within the Army's Budget, thereby leaving no choice but to re-prioritize expending the budgetary resources by way of going slow on some planned acquisitions, reducing the spending etc.

The committee has found that little has been achieved to protect military installations and bases that are increasingly under attack from Pakistan based terrorist.

The committee has said that government needs to move beyond inquiries and policy announcements and make tangible progress.

"The Committee cannot help expressing unhappiness with the state of affairs in the Ministry with regard to existing scenario of 'perimeter security' of defence establishments and installations, including offshore establishments. The Sunjuwan attack underscores the need for speedy measures," the committee said.

The shortfall of funds for army alone has shortfall is staggering Rs 42,512.14 crore.

"Keeping in view the increasing threat perception, which includes various occurrences of external strife and internal dissidence such as Doklam, increased external activities in Tibet over a year, rampant cross border firing, militant activities etc the current budget is not supportive to the inevitable needs of the Army," the committee observed.


NAVY ::

Similarly the Navy has been allocated only 70 per cent of the funds that it had asked for. Against a projected need of of Rs 11,320.39 crore, the allocation has only been to the extent of Rs 7,985.06 crore.

The Committee observed that the allocation amounts to an increase of only Rs 220 crore over Revised Estimate of 2017-18, which works out to a rise of only 2.84 per cent.

The committee after consulting the Indian Navy has said that the increase would not even cater to the inflationary pressure. Matters such as maintaining the requisite armament level as well as emergency procurements would indeed require more funds.

Interestingly, the Committee has found that the Budget has also not factored in the impact that GST will have on the naval expenditure.

The Parliamentary committee has said the Indian Navy has been given only Rs 20,003.71 crore for modernization and new weapon platforms whereas the Navy wanted at least of Rs 33,458.38 crore for the capital segment, the allocation made has been Rs 20,003.71 crore. And, shockingly, it is Rs 5000 crore short when it comes to paying for committed liabilities-liabilities that have incurred in previous years to be paid in the current financial year.

This amounts to a huge shortfall of almost 40 per cent of the budget projected as required and "will indeed have a cascading impact on the operational preparedness and technological upgradation of the Navy"


AIR FORCE ::

The government has provided for either GST or export duties that are now levied on the equipment bought from abroad. There would be an additional burden of taxes due to the new taxation laws.

On this count, the Committee have gathered that in 2016-17 the customs duty paid was to the tune of Rs 943.62 crore, which has since hiked up to Rs 1,614.28 crore in 2017-18.

"This amount has not been reimbursed to the Air Force during the year," the committee has observed.

Like the other two services that IAF too is severely cash strapped. The committee has found that IAF is short by at at least Rs 6,400 crore when it comes budgeted revenue expenditure.

While the IAF had asked for Rs 1,14,526 crore only Rs 65,891 crore have been allocated. In a scathing remark the committee says the budget does not reflect the intent of achieving even the strategic objectives.

 indiatoday

Two years after Cabinet OK, four rail lines for China border await funding

The government is unable to find an estimated Rs 2.1 lakh crore that is needed to construct four ‘priority’ strategic railway lines on the China border.The final location survey (FLS) for these four railway lines is currently being undertaken by the Ministry of Railways after the Cabinet Committee on Security (CCS) gave its approval in December 2015.
Government sources told The Indian Express that the matter has been discussed repeatedly by the Empowered Committee on Border Infrastructure (ECBI), chaired by the Cabinet Secretary, but no conclusive decision on the funding could be arrived at.
The Ministry of Defence has also raised the issue in the Central Permanent Coordination Framework, which has representatives of the Ministry of Railways. The preliminary estimate of Rs 2.1 lakh crore for construction of the four strategic railway lines was provided by the Railways, and a Steering Committee under Secretary (Expenditure) in the Ministry of Finance was formed to look for ways to finance the construction.
As per government sources, Railways have declined to fund construction of these four lines, calling them commercially unviable, both in projected passenger and freight traffic. The Ministry of Defence had allocated Rs 344.84 crore in FY 2016-17 for the FLS of four strategic lines — the 378-km Missamari-Tenga-Tawang line, the 498-km Bilaspur-Manali-Leh line, the 227-km Pasighat-Tezu-Rupai line, and the 249-km North Lakhimpur-Bame-Silapathar line — after the CCS decided to take them up for construction on priority.
Each of these lines will pass through high-altitude terrain of the Himalayas, with issues pertaining to stability, geology, construction, maintenance and repair which need a detailed study. Once constructed, the Bilaspur-Manali-Leh corridor will be the highest railway line in the world, surpassing China’s Qinghai-Tibet railway.
The construction costs are going to be very high because of the very difficult terrain in which these lines will be constructed. Government sources fear that the estimated costs will further shoot up after the FLS is completed in a couple of years, and a detailed project report presented by the Railways.
These four ‘priority’ lines are part of the 14 strategic lines which were identified for development in November 2010, among the 28 railway lines in border areas approved ‘in principle’ by the Defence Minister in January 2010. Preliminary survey for 10 of the 14 lines was completed, but no further work was done even though these rail lines were declared national projects.

 indianexpress