Defence Industry

Budget 2020: What’s in store for defence?

Presenting her maiden budget speech in July 2019, Union Finance Minister Nirmala Sitharaman emphasised on immediate requirement of modernisation and upgradation in defence sector as “a national priority”. However, six months later, Navy Chief Admiral Karambir Singh noted that the armed forces are finding it difficult to prioritize their requirements, owing to budgetary constraints.

He added that the Navy’s declining budget has forced him to re-evaluate the long-term plan to field 200 warships by 2027, a target institutionalised in the Maritime Capability Perspective Plan (MCPP) for 2012-2027. Now, the Navy is expected to have 175 warships by 2027.

Currently, the Navy has about 130 warships and another 50 are under construction in shipyards in and outside the country. The Navy chief has also expressed concerns over its share of defence budget, which has declined from 18 percent in 2012 to approximately 13 percent in the current financial year (2019-20).

The decline has come at a time when the strength of the Indian Navy’s submarine fleet has dwindled from a total of 21 submarines in the 1980s to 15 conventional submarines, besides one homemade Arihant-class submarine and one Russian Akula-class submarine operating on lease.

To make matters worse, the Indian Navy is operating with half of its submarine fleet strength as most of the vessels are in the last leg of their active operational life or are on mid-life upgrades. Meanwhile, China has a strength of 65 subs.

His counterparts—Chief of Air Staff Air Chief Marshal R.K.S. Bhaduria and Army chief General M.M. Naravane—also have their hopes high from the second budget of the Modi 2.0 government. With most of the budgetary allocation going for the committed liabilities and payment of salaries and pensions for defence personnel, the defence is expecting more allocation as several of the big-ticket procurements are lined up.

India’s defence allocation crossed Rs 3-lakh crore mark for the first time in the 2019-20 budget. At Rs 4,31,010.79 crore, including defence pensions, the total allocation accounted for 15.47 per cent of the Central government expenditure for the year.

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