10 Per cent Hike In Indian Defence Budget for 2008-09
Dated 2/3/2008
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India on Friday jacked up defence spending by 10 percent to $26.4 billion, the steepest hike since partition of the subcontinent to fund a mammoth modernisation programme. Finance Minister P.Chidambaram boosted expenditure for the fiscal year ending March 2009 from the previous allocation of $24 billion, saying security was of paramount importance.
India plans to spend at least $30 billion until 2012 to modernise the military with an immediate purchase of 126 war jets costing $12 billion followed by ships, submarines, artillery and other hardware in coming years. Weapons: Chidambaram set aside $12 billion for arms purchases during the current fiscal year after New Delhi promised the armed forces will not face funds shortages in the drive to upgrade material.
“Any further amount that is needed for the defence forces, especially for capital expenditure, will be provided,” he told parliament. The 1.23-million-strong army, the world’s fourth largest, received $9 billion to help modernize mechanized divisions, artillery and air defence units. Chidambaram also set aside millions of dollars in addition to the annual defence outlay to set up institutions and schools for families of servicemen and women. He committed $1.85 billion to the navy which is shopping for six submarines in addition to the six it bought last year from Armaris and European defence firm MBDA for $3 billion.
The 137-ship navy is also in advanced negotiations to buy eight long-range reconnaissance planes from either US-based Boeing or the European consortium EADS for $2 billion, besides building a nuclear-powered submarine. Chidambaram allotted $2.71 billion for the airforce which is still flying ageing Russian MiG jets. The remaining funds were marked for research development and ordnance factories which are in the process of deploying India’s guided and ballistic missiles that can carry nuclear warheads. Defence Minister AK Antony hailed the budget. “The modernization drive would continue full steam,” he said.
“The armed forces had been hit by a resource crunch in the 90s and now time has come to equip them with latest weapons and systems to ensure that country’s borders are safe. “The modernization would be across the board in all three services — army, navy and air force — as well as in country's strategic programmes like missiles,” he told reporters. However, senior commanders privately said the funds might not suffice to meet the long-term modernization programme. “The 10 percent increase will barely offset our nearly five percent inflation rate and 40 percent funds will go for the upkeep of assets and our existing manpower,” a senior infantry commander said.
The unprecedented increase was likely to be closely monitored in Pakistan which has accused nuclear rival India of sparking an arms race by spending almost three percent of GDP on its million-plus military forces. For the current fiscal year which ends March 31, India increased defence spending by 7.8 percent. Also, India for the first time set aside $125 million to be spent on the “urgent needs of development of border areas” such as Arunachal Pradesh state, which is claimed in full by communist China.