Defence Capital Budget cut by Rs 13,000 Crore

The Ministry of Finance has slashed around Rs 13,000 crore out of the capital outlay of Rs 94,588 crore allocated to the Armed Forces in the current fiscal to meet the defence force’s revenue expenditure. This cut in the capital budget is likely to impact the modernization process of the three defence services adversely with the inkling of several important deals getting derailed further. The capital budget for the Indian Navy and the Air Force have been cut between Rs 4,000 crore to Rs 5,000 crore, which means that no new import of defence acquisition contract which were close to being finalized may be signed this fiscal which includes the 126 MMRCA, 22 Apache attack helicopters, 15 Chinook heavy-lift helicopters and 16 Multi Role Helicopters. Even the Indian Army is faced with a nearly Rs 4500 crore cut in its capital budget this fiscal, forcing it to bring down its more than 100 proposals for weapons and equipment acquisition to 20 important ones, of which seven critical ones are being fast-tracked by the government. The list includes 814 mounted artillery guns, 8,000-odd Spike third-generation anti-tank guided missiles; upgradation of the entire fleet of battle tanks and infantry combat vehicles; assault rifles; bullet-proof jackets and helmets and night-vision devices.


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