Mumbai, March 5: Defence Minister Manohar Parikar is believed to have asked the armed forces to “cut flab” following the Union Budget 2016 that was tabled earlier this week.

With Finance Minister Arun Jaitley giving defence allocation a skip during his budget speech in the Parliament on Monday, the entire country went into guessing mode as to how much has been allocated for defence. So Parikar came out to clear the air on Friday and explained that the Union budget was falling short of demand.

According to the Defence Minister, the total defence allocation in the Union Budget 2016 for the 2016-2017  fiscal was Rs 3,41,000 crore, which included the pensions too. This was estimated to 17.23 per cent of overall central expenditure of Rs 19,78,060 crore. The allocation for pensions though is 82,000 crore. Rs 70,000 crore would be spent to buy new equipment for the armed forces.

Parikar also confirmed that first-time stock-taking of cash flow for purchases in defence found that $3 billion was held with the United States government for government to government contracts. (Also Read: Pranab Mukherjee honours elite helicopter unit involved in 26/11 operations)

“The money had piled up and was not used because of ill management (sic)”, said Parrikar. “But last May/June we realised that the money was lying there quite unnecessarily. So we re-calibrated the full management for the $3 billion and now it has come down to about $1.7 to $1.8 billion,” the minister explained in a media briefing in the capital.

The minister also said that it would return the unspent capital fund of Rs 13,000 in the current financial year. Since saving is what he is aiming for, the minister has already asked the armed forces to identify the areas where they can apply some cost cutting.

However, senior officials from the army though maintain that cost cutting on manpower is possible only after we embrace new technology and not before that.