NEW DELHI\u00a0\u2014\u00a0India’s defense spending will rise by about 10 percent in the next financial year to\u00a0$40.29 billion, from\u00a0$36.61 billion in the previous financial year.<\/p>\n\n\n\n
Analysts, however, say the hike is insufficient, as it will merely compensate for inflation and pay for past commitments, leaving fewer funds to buy new weapons and equipment.<\/p>\n\n\n\n
“The rise will just about take care of the purchase of 36 Rafale fighter jets from France at $8.8 billion [contracted November 2016] and pay for past commitments, and giving practically no funds to replace the aging Soviet-era weaponry,” according to defense analyst Nitin Mehta.<\/p>\n\n\n\n
Apart from the Rafale contract, additional funds will be used to pay for $3 billion worth of weapons from Russia and Israel, for which India signed in late 2016 to offset the depleting stock of anti-tank missiles, tank engines, rocket launchers and various kinds of ammunition. Only partial payment was made for these contracts.
Under the Capital Acquisition Head\u00a0\u2014\u00a0the budget for fresh purchases of armaments and weapons systems and covering previous, incomplete defense contracts\u00a0\u2014\u00a0Finance Minister Arun Jaitley allocated $12.65 billion for the next financial year, an increase of 9.3 percent from last year’s $11.47 billion.
However, the Ministry of Defence (MoD) left $1 billion unspent from last year’s Capital Acquisition Head due to delays by the MoD in clearing defense deals.<\/p>\n\n\n\n
India has been cutting defense spending for several years. “Since 2009-10, budget defense expenditure has dropped from 2.19 percent of the gross domestic product to only 1.65 percent,” Mehta said.<\/p>\n\n\n\n
Justifying the budget allocation, Amit Cowshish, a former financial adviser with the MoD, said: “It has to be recognized that there are serious limitations on the government’s ability to raise its revenues and consequently on how much it can allocate.”<\/p>\n\n\n\n
Several projects that are in the final stages of procurement and are awaiting\u00a0funding include:
India needs $233 billion to meet its weapons and equipment requirements\u00a0in the next 11 years, according to the MoD’s “Long Term Integrated Perspective Plan\u00a02012-27.” As such, the country will need to hike its spending each year by 10 percent.<\/p>\n\n\n\n
Analysts, however, say the hike is insufficient, as it will merely compensate for inflation and pay for past commitments, leaving fewer funds to buy new weapons and equipment.<\/p>\n","protected":false},"author":7,"featured_media":115395,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[45,44,8,11],"tags":[],"coauthors":[3390],"class_list":["post-57545","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia-pacific","category-budget","category-congress","category-global"],"acf":{"subheadline":"","legacy_arc_id":"IHXFMDVXSZCK3BXO5F6FOS7BQE","arc_canonical_url":"\/2017\/02\/01\/india-hikes-defense-spending-by-10-percent\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"\n