New Delhi (Sputnik) — The budget document that was presented by India's minister of finance (interim) in the parliament on Friday noted that the government will allocate around $43 billion in the financial year 2019-20, ending in March 2020, in comparison to $41 billion in 2018-19.
A defence analyst talking to Sputnik has termed the increase "very nominal", especially against the backdrop of the rising level of expenditure by China to modernise its forces.
"It is inadequate to allow for inflation, hike in pay and allowances and for the defence acquisition bill in the backdrop of sharp fall in the value of rupee against the US dollar", Brigadier Gurmeet Kanwal, a defence analyst, told Sputnik while mentioning that the country fulfils 70% of its requirement of weapons and equipment from imports.
Given the fact that most of India's defence allocation goes into paying salaries and allowances ($28 billion), only $14.5 billion will be left for the modernisation of the armed forces.
"Acceptance of Necessity (AoN) approvals accorded by the Indian Defence Ministry for new acquisition projects worth $21 billion-$28 billion by the government over the last five years are meaningless without roll-on funding support on the capital account. Do we want to repeat 1962 (war with China) all over again?" Brigadier Kanwal added.
As per the budget document, the government will use $5.5 billion for the capital acquisition for the Indian Air Force. The Indian Army, which is facing a shortage of small arms and infantry vehicles, will get $4.1 billion for weapons and equipment. The Indian Navy, currently seeking naval helicopters, submarines, warships and aircraft carriers, will get $3.2 billion for the capital acquisition. In the last financial year, the overall capital budget was $13.2 billion, which means there is an increase of only $1.3 billion from the financial year 2018-19.
Nevertheless, Minister Piyush Goyal added: "We will provide additional funds if required".
The Indian government concluded defence deals, including the purchase of S-400 air defence and missile systems at a cost worth $5.43 billion, and missile frigates worth around $1.5 billion with Russia. The first tranche of payments for these deals is likely to be made in the financial year 2019-20. Furthermore, balance payment for Rafale fighter jet to France and transport aircraft to the US are also to be made this year.