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$30 billion: Arms bill for five years
Shopping List: 155-mm Howitzers, Multi-Role Fighter Jets, Advanced UAVs And More…
Rajat Pandit | TNN
New Delhi: From 155-mm artillery howitzers and multirole fighter jets to advanced UAVs (unmanned aerial vehicles) and third-generation night-fighting capabilities, the armed forces are looking to sign several mega defence deals over the next few years.
In keeping with this desperately needed thrust for modernisation, India plans to spend well over $30 billion (around Rs 140,000 crore) for acquisition of military hardware and software during the 11th Plan period (2007-2012).
India is already one of the largest defence importers in the world, spending as it did a staggering $6 billion on armament purchases just in 2004-2005. This when two other big buyers, Saudi Arabia and China, notched up defence deals valued between just $2-3 billion each during that year.
As per the projections in the 11th Defence Plan being finetuned by defence ministry, India’s defence expenditure will cross the notional ‘Laxman Rekha’ of 2.5% of GDP for the first time since the early 1990s. Pakistan and China, incidentally, spend over 4.5% of their GDPs on defence.
‘‘Though less than the 3% was demanded by armed forces, we expect the defence expenditure to reach 2.57% of GDP in the 11th Plan from the present 2.33%. We are looking at an overall 9% growth in defence expenditure,’’ said an official.
Estimates for the still-under way 10th Plan (2002-2007) show India would have spent almost Rs 120,000 crore for modernisation of its armed forces by the end of the 2006-2007 fiscal. ‘‘In the annual defence budget, around 60% is revenue expenditure (day-today costs), while 40% is the capital component (new procurements). We aim to make it 50-50 in the next few years to ensure more funds for modernisation,’’ he said.
It’s no wonder that defence minister Pranab Mukherjee has already declared that $10 billion (Rs 46,000-crore) would flow back into India for investment through ‘‘direct offsets’’ in defence deals during the 11th Plan period.
The new ‘‘offset’’ clause, introduced by the Defence Procurement Procedure-2005 for all defence deals over Rs 300 crore, ensures that any armament company which bags a large order will be obligated to invest 30% of the total value within India.
The 11th Plan will, of course, see the signing of the mother of all defence deals, the acquisition of 126 multirole combat aircraft, valued well over $6.5 billion, for IAF.
The Army, on its part, is desperate for its Rs 8,000-10,000-crore long-term artillery modernisation project to kick off, with the progressive induction of a large number of towed and self-propelled 155mm 52-calibre guns.
There is, of course, many a slip between the cup and the lip. The defence arena has been plagued by lack of proper long-term planning and inter-service prioritisation, coupled with absence of coordination with finance ministry. The armed forces are keeping their fingers crossed.
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