NEW DELHI: The armed forces have been on an over spending
drive surpassing all the last year’s targets and Finance Minister Pranab Mukherjee has set aside more funds to fuel some big ticket arms purchases in the coming months that could also see a military aviation boom.
The capital expenditure, money that goes into buying arms and equipment, has gone up by 25 percent, which experts felt, is aimed at new contracts that are on the verge of being finalised in the next financial year.
Some big deals that are in the pipeline include an estimated $ 10.4 billion contract for 126 multi-role combat jets for the Indian Air Force and purchase of around 200 helicopters. One striking difference in the budget trend from the past is that the defence spendings have surpassed estimates. The Finance Minister had allocated `60,000 cr under capital expenditure last year, but the Defence Ministry spent `60833.25 cr, a feat never achieved recently. Infact, MoD had been returning money to the exchequer all these years. This year the allocation is is `69198.81 cr.
“This is a good trend and shows the capacity to absorb funds meant for modernisation has gone up,” said defence analyst Laxman Behera, senior fellow at the Institute of Defence Studies and Analysis.