New Delhi, Mar 14: Vice Chief of Army Staff, Lt Gen Sarath Chand on Tuesday deposed to the Parliamentary panel on Defence Budget 2018-19 and expressed grave concern at the ‘insufficient’ allocation of funds. A marginal increase in the defence budget barely accounts for inflation, he told Parliament’s Standing Committee on Defence, adding that the Budget announced on February 1 “has dashed our hopes”.

“The Budget 2018-19 has dashed our hopes and most of what has been achieved has actually received a little setback. The marginal increase barely accounts for inflation and does not even cater for taxes,” Army vice-chief told the parliamentary panel, chaired by BJP leader Major General B C Khanduri. This may end in the foreclosure of 25 ‘Make in India’ Defence projects that are currently in the pipeline, Lt Gen Sarath Chand added.

Army has been allocated just Rs 268.2 billion for equipment modernisation against the Rs 445.7 billion it had projected, according to a draft report by Parliament’s Standing Committee on Defence. “Allocation of Rs 21,388 crore for modernisation is insufficient even to cater for committed payments of Rs 29.033 crore for 125 ongoing schemes, emergency procurement and other requirements,” Army vice-chief told the parliamentary panel.

Expressing grave concern at the ‘insufficient’ allocation of funds for modernisation, Lt Gen Chand said, “We have no choice but to leave out some priority acquisition cases. 63 per cent of Army budget goes into paying salaries, 14 per cent for modernization. We need 20-25 per cent of Army Budget for modernization.” He pointed out that 68 per cent of the Army’s equipment of vintage category and only 8 per cent in the “state of the art” category.

The parliamentary panel said that it was aghast to note this dismal scenario. “We are aghast to note this dismal scenario where the representatives of the Services have themselves frankly explained the negative repercussions on our defence preparedness due to inadequate fund allocations,” said the panel in a series of reports tabled in Parliament on Tuesday.

The “net” Defence Budget for 2018-2019, at Rs 2.79 lakh crore, works out to just 1.49 per cent of the GDP, the lowest such figure since the 1962 war with China. While the Army got just 60 per cent of its projected requirement for modernisation and new weapon systems, the Navy and Indian Air Force got 56 per cent and 46 per cent respectively.