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Indian Navy, Air Force Stare at Funds Shortage in the Next Year; Interim Budget Allocation Not Enough

Defence Minister Nirmala Sitharaman has reportedly been notified of the same.

Per reports, in the financial year 2019-2020, the Indian Navy and the Air Force will not have sufficient funds to be able to make payments for equipment they have bought or have agreed to buy in the past.

Hindustan Times reported that an anonymous Defence Ministry official has confirmed that Defence Minister Nirmala Sitharaman has reportedly been informed of the same. The said official added that while the army is better off than the Navy and the IAF, it too faces a general shortage of funds.

An allocation of Rs 1.03 lakh crore has been made to cover capital expenditures of the three forces. Out of this, Rs 23,156.43 crore has been allotted to the Indian Navy which has liabilities worth Rs 25,461 crore, reported HT.

“Either we are allocated more funds later in the year, or we need to cut down on expenditure elsewhere if we have to meet all liabilities that we have agreed on,” a senior Naval officer told HT.

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A third option is to roll-over the liability to the next financial year, according to an anonymous defence ministry official who spoke to HT. However, “rolling over committed liabilities happens but is not a healthy practice. Importantly, it reflects poorly on the country,” Amit Cowshish, the former chief financial adviser to the ministry of defence told HT, adding that this may be the first time in years that such a situation has arisen.

The Air Force received INR 39,302.64 crore whereas its liabilities are measured at Rs 47,413 crore. Amongst the big purchases by the IAF, the Rafale stands out as a significant liability.

In the interim budget announced by Piyush Goyal, a total of INR 3.05 lakh crore (excluding pensions) was allocated for the three forces.

HT reported that the Indian Army is yet to receive the Rs 1,487 crores that were sanctioned to secure perimeter and provide for installations at the frontiers, such as the one in Uri, Jammu and Kashmir and the North East. This allocation was made after the terrorist attack on the Sunjuwan camp in Jammu in February 2018.

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