Defence Budget Allocation & Defence Procurement Procedure : News & Discussions
- Thread starter Ashwin
- Start date
15-18 billion maybe not sure.
But anything like 25 billion of CAPEX while simultaneously cutting down atleast 1 lakh numbers from non combative arms and then reorganising the Army and Airforce Commands... Quite a lot will be available.
This budget? Nope. 2022+.
This budget is only for emergency procurement and some other short to mid-term deals that can finish in a few years, like Rafale, S-400, P-8I, Apache, LCA Mk1A etc. Big ticket, long term deals with 10-15 year procurement cycles will happen after 2022.
Anyway--
India to spend a whopping USD 130 billion to modernise forces
It's because there's nothing long term is expected to be signed this year, or the next or the one after. So you are going to be 'disappointed' two more times.
Did anybody stop MoD to sign any new deal this year ?? There are tons of defense purchases pending for all 3 services and according to you Indian govt should wait till 2022!! Kyon bhai, subh muhurat 2022 mein nikla hey kya ??
Because of process. All major defence spending is geared towards signature by the end of Modi's current term. So you can look forward to signatures of major projects like MMRCA, P-75I, FRCV and NUH from 2022-24. Until then it's going to be competition and negotiations.
In the meantime, we will most definitely be signing other major deals, like 83 LCA Mk1A, 464 T-90MS, 2nd batch of Rafale, 2nd batch of S-400, 10 P-8I, 2 Phalcons, 21 Mig-29, 18 MKI etc over the next 3 years. Not counting a whole host of indigenous projects that are coming up, both for development and production.
So there's plenty of stuff coming up even without the long term, big ticket items.
I know about the process. If the process takes time who stopped the govt to proactively pursue the so called "PROCESS" ?? Why didn't they proceed for P-75I or Naval helicopters etc ?? It's just hog wash and delay tactics, nothing else!! They always have the G2G option which they have used according to their own convenience.
Because there are a lot of stakeholders and not everybody was on board. The biggest obstacle to the SPM were the SPs themselves. The govt wanted to release all tenders a year after the DPP-2016 was released, that's 2017, but it was hijacked by all the potential SPs because they all wanted to add their own 2 cents in. This process took an extra year, and because of elections, all the tenders were pushed to the new term instead. It's already delayed by another year now because of the new DPP.
GTG was used very well. We got a lot of stuff in the meantime that made up for any delays with most of the tenders. And no, GTG was never used out of convenience at all. Every deal signed under NDA have been out of compulsion based on forces request, not politics.
Now the govt's working on DPP-2020 with all the additional changes the SPs wanted. Even the DPM, which has not been changed since 2009, will be revised. It will come out by March next year.
The delays have little to do the govt itself.
Dinakar Peri (@dperi84) Tweeted:
We will not only make India an economic superpower but a superpower.
By 2032 we aim for Indian economy to be $10 trillion... Defence will have the biggest contribution in this: @DefenceMinIndia @rajnathsingh at annual session of @SIDMIndia @FollowCII
@the_hindu Dinakar Peri on Twitter ( )
Dinakar Peri (@dperi84) Tweeted:
Our govt has introduced far reaching reforms in the last five years... These reforms have touched all aspects of defence procurement, @rajnathsingh Lists out steps taken in this direction ( )
Dinakar Peri (@dperi84) Tweeted:
In our envisaged Defence Production Policy, we have spelt out our goal to achieve a turnover of $26 billion in aerospace and defence goods and services by 2025, involving an additional investment of $10 billion and creating employment for nearly 2-3 million people: @rajnathsingh ( )
Totally tongue in cheek!
@Ashwin ; @Milspec ; @randomradio
I'm referring to myself not Rajnath Singh.
We will not only make India an economic superpower but a superpower.
By 2032 we aim for Indian economy to be $10 trillion... Defence will have the biggest contribution in this: @DefenceMinIndia @rajnathsingh at annual session of @SIDMIndia @FollowCII
@the_hindu Dinakar Peri on Twitter ( )
Dinakar Peri (@dperi84) Tweeted:
Our govt has introduced far reaching reforms in the last five years... These reforms have touched all aspects of defence procurement, @rajnathsingh Lists out steps taken in this direction ( )
Dinakar Peri (@dperi84) Tweeted:
In our envisaged Defence Production Policy, we have spelt out our goal to achieve a turnover of $26 billion in aerospace and defence goods and services by 2025, involving an additional investment of $10 billion and creating employment for nearly 2-3 million people: @rajnathsingh ( )
Totally tongue in cheek!
@Ashwin ; @Milspec ; @randomradio
I'm referring to myself not Rajnath Singh.
Aerospace and defence will contribute in a very large way to our manufacturing sector over the next decade.
@Ashwin could you modify the name of the thread to "Defence budget allocation and acquisitions" we need a general acquisition news thread.
@randomradio @_Anonymous_ @BlackOpsIndia @Falcon @vstol Jockey @Ankit Kumar et al.
India, US $7.5 billion defence deals for armed drones, spy planes in pipeline
2 min read . Updated: 18 Nov 2019, 07:06 AM IST ANI
Sea Guardian drone.(Reuters )
NEW DELHI : Amid growing military ties between India and the United States, the Indian armed forces are moving closer towards deals for procuring American defence equipment worth over $7 billion from America, including Sea Guardian armed drones and naval spy planes.
The two projects are moving ahead separately as one of them is a tri-services project while the other is being steered by the Indian Navy.
"All the three services are collating their requirement for the Sea Guardian armed drones which will give us a strong capability in terms of high altitude long endurance unmanned aerial vehicles and also enhance our capabilities to carry out surveillance," government sources told ANI.
They said since some of the capability requirements of the three services would be different from each other, their collation would take a few months and a Letter of Request is expected to be issued to the American government for the government-to-government deal by the February-March time frame.
The Trump administration had approved the sale of armed drones to India in June this year and offered it to be equipped with required missiles and other systems.
Earlier, among the three services, only the Navy seemed to be interested in the procurement but now all the three services are showing interest in the project, the sources said.
The project is expected to cost over $4.5 billion to the defence services.
Once the Letter of Request (similar to a Request for Proposal) is issued to the American government for the deal under its Foreign Military Sales route, the American side would send the Letter of Acceptance in which it will specify the terms and conditions for the project.
The other major deal in the pipeline is the project for the acquisition of the 10 P-8I anti-submarine warfare and long-range surveillance aircraft which would be adding to the existing fleet of 12 such planes in the Indian Navy.
The sources said the project was supposed to be fielded before the Defence Acquisition Council in its last meeting but was withheld due to some reasons. "Now the proposal is expected to be put up before the DAC again in the next meeting," the sources said.
The P-8I planes are expected to cost around $3 billion. These planes would also be acquired under the FMS route once it gets final approval from the Cabinet Committee on Security headed by Prime Minister Narendra Modi.
In the last over one decade, India has inducted a large number of American defence hardware including Apache attack choppers, Chinook heavy-lift Helicopters, C-17 Globemaster and C-130J Super Hercules Transport aircraft, M-777 ultra-light howitzers and AN-TPQ weapon locating radars.
The two sides are also in discussions for the NASAMS air defence system for providing protection to the national capital region.
India, US $7.5 billion defence deals for armed drones, spy planes in pipeline
@randomradio @_Anonymous_ @BlackOpsIndia @Falcon @vstol Jockey @Ankit Kumar et al.
India, US $7.5 billion defence deals for armed drones, spy planes in pipeline
2 min read . Updated: 18 Nov 2019, 07:06 AM IST ANI
- The Trump administration had approved the sale of armed drones to India in June this year
- The other major deal in the pipeline is the project for the acquisition of the 10 P-8I anti-submarine warfare and long-range surveillance aircraft
Sea Guardian drone.(Reuters )
NEW DELHI : Amid growing military ties between India and the United States, the Indian armed forces are moving closer towards deals for procuring American defence equipment worth over $7 billion from America, including Sea Guardian armed drones and naval spy planes.
The two projects are moving ahead separately as one of them is a tri-services project while the other is being steered by the Indian Navy.
"All the three services are collating their requirement for the Sea Guardian armed drones which will give us a strong capability in terms of high altitude long endurance unmanned aerial vehicles and also enhance our capabilities to carry out surveillance," government sources told ANI.
They said since some of the capability requirements of the three services would be different from each other, their collation would take a few months and a Letter of Request is expected to be issued to the American government for the government-to-government deal by the February-March time frame.
The Trump administration had approved the sale of armed drones to India in June this year and offered it to be equipped with required missiles and other systems.
Earlier, among the three services, only the Navy seemed to be interested in the procurement but now all the three services are showing interest in the project, the sources said.
The project is expected to cost over $4.5 billion to the defence services.
Once the Letter of Request (similar to a Request for Proposal) is issued to the American government for the deal under its Foreign Military Sales route, the American side would send the Letter of Acceptance in which it will specify the terms and conditions for the project.
The other major deal in the pipeline is the project for the acquisition of the 10 P-8I anti-submarine warfare and long-range surveillance aircraft which would be adding to the existing fleet of 12 such planes in the Indian Navy.
The sources said the project was supposed to be fielded before the Defence Acquisition Council in its last meeting but was withheld due to some reasons. "Now the proposal is expected to be put up before the DAC again in the next meeting," the sources said.
The P-8I planes are expected to cost around $3 billion. These planes would also be acquired under the FMS route once it gets final approval from the Cabinet Committee on Security headed by Prime Minister Narendra Modi.
In the last over one decade, India has inducted a large number of American defence hardware including Apache attack choppers, Chinook heavy-lift Helicopters, C-17 Globemaster and C-130J Super Hercules Transport aircraft, M-777 ultra-light howitzers and AN-TPQ weapon locating radars.
The two sides are also in discussions for the NASAMS air defence system for providing protection to the national capital region.
India, US $7.5 billion defence deals for armed drones, spy planes in pipeline
5-year defence budget plan could end financial woes of armed forces
The Ministry of Defence is working on a new budget model that is based on a futuristic five-year vision for critical military procurement.
By Abhishek Bhalla, New Delhi, November 27, 2019 22:28 IST
File photo : Defence Minister Rajnath Singh.
The Ministry of Defence is working on a new budget model that is based on a futuristic five-year vision for critical military procurement that will allow the forces to use funds more efficiently and also enhance capital expenditure, top sources in the defence establishment said.
There is a view that instead of the allocation being done on per centage of the GDP annually it should be done on a five-year modernisation plan.
The current defence budget of Rs 3.18 lakh crore sanctioned by the NDA government after it came back to power earlier this year is 1.6 per cent of the GDP which is said to be the lowest in many decades.
The fluctuations in GDP affect the budget of the defence forces not allowing them to put in place a modernisation plan with a vision.
Sources said that Defence Minister Rajnath Singh has asked the forces to give their five-year requirements to make an assessment of the future budget allocation for the period.
It is being discussed at various levels and consultations are on for a five-year budget model, said a senior official in the defence establishment.
This will ensure better utilisation of funds and also ensure that there is no lapse of funds at the end of the year and it can be used over a period of five years. It will also enhance the efficiency in procurement, the official added.
In the current budget allocation out of Rs 3,18,931.22 crore allocated for the financial year 2019-20, Rs 2,10,682.42 crore is for revenue expenditure that takes care of salaries and maintenance of establishments, the remaining Rs 1, 08,248.80 crore for capital expenditure to buy military equipment and latest armoury.
Sources say with a five-year plan the capital expenditure allocation can also be higher that allow speeding up of critical procurement.
The current budget allocation has little scope for a leap as far as modernisation of armed forces is concerned as capital expenditure meant for big ticket procurement did not increase to match the requirements to transform the forces with modern equipment.
The capital allocation will only take care of the committed liabilities, which in effect means making payments towards purchases already finalised. This means the amount will not be enough to make new purchases, said an official.
While the Air Force needs to replace its ageing fleet of fighter jets and is looking for 114 aircraft beyond the 36 Rafale jets, the Navy needs to enhance its capabilities by adding more submarines and aircraft carriers. The army’s modernisation plans are also slow-paced to bring in latest weapon systems and ammunition.
5-year defence budget plan could end financial woes of armed forces
The Ministry of Defence is working on a new budget model that is based on a futuristic five-year vision for critical military procurement.
By Abhishek Bhalla, New Delhi, November 27, 2019 22:28 IST
File photo : Defence Minister Rajnath Singh.
The Ministry of Defence is working on a new budget model that is based on a futuristic five-year vision for critical military procurement that will allow the forces to use funds more efficiently and also enhance capital expenditure, top sources in the defence establishment said.
There is a view that instead of the allocation being done on per centage of the GDP annually it should be done on a five-year modernisation plan.
The current defence budget of Rs 3.18 lakh crore sanctioned by the NDA government after it came back to power earlier this year is 1.6 per cent of the GDP which is said to be the lowest in many decades.
The fluctuations in GDP affect the budget of the defence forces not allowing them to put in place a modernisation plan with a vision.
Sources said that Defence Minister Rajnath Singh has asked the forces to give their five-year requirements to make an assessment of the future budget allocation for the period.
It is being discussed at various levels and consultations are on for a five-year budget model, said a senior official in the defence establishment.
This will ensure better utilisation of funds and also ensure that there is no lapse of funds at the end of the year and it can be used over a period of five years. It will also enhance the efficiency in procurement, the official added.
In the current budget allocation out of Rs 3,18,931.22 crore allocated for the financial year 2019-20, Rs 2,10,682.42 crore is for revenue expenditure that takes care of salaries and maintenance of establishments, the remaining Rs 1, 08,248.80 crore for capital expenditure to buy military equipment and latest armoury.
Sources say with a five-year plan the capital expenditure allocation can also be higher that allow speeding up of critical procurement.
The current budget allocation has little scope for a leap as far as modernisation of armed forces is concerned as capital expenditure meant for big ticket procurement did not increase to match the requirements to transform the forces with modern equipment.
The capital allocation will only take care of the committed liabilities, which in effect means making payments towards purchases already finalised. This means the amount will not be enough to make new purchases, said an official.
While the Air Force needs to replace its ageing fleet of fighter jets and is looking for 114 aircraft beyond the 36 Rafale jets, the Navy needs to enhance its capabilities by adding more submarines and aircraft carriers. The army’s modernisation plans are also slow-paced to bring in latest weapon systems and ammunition.
5-year defence budget plan could end financial woes of armed forces
Defence ministry should ‘strongly press’ for more funds, says Parliamentary panel
The panel has underlined need to provide budgetary support to the armed forces.
Updated: Dec 24, 2019 07:58 IST
By Rahul Singh
India’s defence budget for 2019-20 stands at Rs 3.18 lakh crore. This includes a capital outlay of just Rs 1,03,394 crore that is not enough to upgrade capabilities and more money is required to avoid a funding crisis. (PTI)
A parliamentary panel has asked the defence ministry to “strongly press” for additional funds from the finance ministry to enable the military to buy new equipment and also pay for weapons and systems it has already contracted to purchase, at a time when the armed forces have projected a combined requirement of almost Rs 1 lakh crore more under the capital head for 2019-20.
In a series of reports on demands for grants of the defence ministry for 2019-20, the Parliamentary standing committee on defence on Monday underlined the need to provide adequate budgetary support to the armed forces for powering different modernisation programmes and also pay for committed liabilities or procurements already made in the previous years.
India’s defence budget for 2019-20 stands at Rs 3.18 lakh crore. This includes a capital outlay of just Rs 1,03,394 crore that is not enough to upgrade capabilities and more money is required to avoid a funding crisis, said three senior military officers asking not to be named. The additional money sought by the army, navy and air force almost equals this year’s capital expenditure.
Measured against the country’s GDP, India’s defence spending currently stands at around 1.5% of the GDP, the lowest in decades. Several experts have argued that India should spend 3% of its GDP to build military capabilities to counter a combined threat from China and Pakistan. In written submissions to the parliamentary panel, the defence ministry said the requirements projected by the three services had been forwarded to the finance ministry for “favourable consideration”.
“While allocating funds, the ministry of finance analysed past absorption capacity of the services and the pace of expenditure in the current financial year. The committee understood that if this logic was applied, there was no reason not to allocate requisite budget for the forces as for the past few financial years they had been able to fully utilise the funds allocated to them at the revised estimates stage,” the panel said.
The armed forces have so far spent over 90% of funds on modernisation and committed liabilities, said the first senior officer. “Under the defence services estimates, committed liabilities constitute a significant element in respect of the capital acquisition segment, since one project may span several financial years. As such, it is important to track the element of committed liabilities, which hold first charge on budget allocation. The committee found the shortage baffling, as these are payments towards procurements made in previous years,” the panel said, recommending that allocation as promised should be disbursed for committed liabilities. On December 3, navy chief Admiral Karambir Singh highlighted that the navy needed funds for pursuing modernisation programmes as its share of the defence budget had declined from 18% to 13% during the last five years. The capital expenditure of Rs 23,156 crore earmarked for the navy isn’t sufficient to meet requirements and the service needs at least Rs 20,000 crore more, said the second officer.
Likewise, the capital expenditure of Rs 39,300 crore earmarked for IAF in this year’s budget is not enough and it requires an additional Rs 40,000 crore to upgrade capabilities, he added.
The army is seeking additional funds as the Rs 29,461 crore earmarked for the force fall short of its needs, said the third officer. Experts agree that the military needs more money. “A higher outlay is necessary for the armed forces to start becoming future-ready. While it is axiomatic that this will need more capital funding, the services too need to invest these and future funds more imaginatively,” said military affairs expert Rear Admiral Sudarshan Shrikhande (retd).
Defence ministry should ‘strongly press’ for more funds, says Parliamentary panel
The panel has underlined need to provide budgetary support to the armed forces.
Updated: Dec 24, 2019 07:58 IST
By Rahul Singh
A parliamentary panel has asked the defence ministry to “strongly press” for additional funds from the finance ministry to enable the military to buy new equipment and also pay for weapons and systems it has already contracted to purchase, at a time when the armed forces have projected a combined requirement of almost Rs 1 lakh crore more under the capital head for 2019-20.
In a series of reports on demands for grants of the defence ministry for 2019-20, the Parliamentary standing committee on defence on Monday underlined the need to provide adequate budgetary support to the armed forces for powering different modernisation programmes and also pay for committed liabilities or procurements already made in the previous years.
India’s defence budget for 2019-20 stands at Rs 3.18 lakh crore. This includes a capital outlay of just Rs 1,03,394 crore that is not enough to upgrade capabilities and more money is required to avoid a funding crisis, said three senior military officers asking not to be named. The additional money sought by the army, navy and air force almost equals this year’s capital expenditure.
Measured against the country’s GDP, India’s defence spending currently stands at around 1.5% of the GDP, the lowest in decades. Several experts have argued that India should spend 3% of its GDP to build military capabilities to counter a combined threat from China and Pakistan. In written submissions to the parliamentary panel, the defence ministry said the requirements projected by the three services had been forwarded to the finance ministry for “favourable consideration”.
“While allocating funds, the ministry of finance analysed past absorption capacity of the services and the pace of expenditure in the current financial year. The committee understood that if this logic was applied, there was no reason not to allocate requisite budget for the forces as for the past few financial years they had been able to fully utilise the funds allocated to them at the revised estimates stage,” the panel said.
The armed forces have so far spent over 90% of funds on modernisation and committed liabilities, said the first senior officer. “Under the defence services estimates, committed liabilities constitute a significant element in respect of the capital acquisition segment, since one project may span several financial years. As such, it is important to track the element of committed liabilities, which hold first charge on budget allocation. The committee found the shortage baffling, as these are payments towards procurements made in previous years,” the panel said, recommending that allocation as promised should be disbursed for committed liabilities. On December 3, navy chief Admiral Karambir Singh highlighted that the navy needed funds for pursuing modernisation programmes as its share of the defence budget had declined from 18% to 13% during the last five years. The capital expenditure of Rs 23,156 crore earmarked for the navy isn’t sufficient to meet requirements and the service needs at least Rs 20,000 crore more, said the second officer.
Likewise, the capital expenditure of Rs 39,300 crore earmarked for IAF in this year’s budget is not enough and it requires an additional Rs 40,000 crore to upgrade capabilities, he added.
The army is seeking additional funds as the Rs 29,461 crore earmarked for the force fall short of its needs, said the third officer. Experts agree that the military needs more money. “A higher outlay is necessary for the armed forces to start becoming future-ready. While it is axiomatic that this will need more capital funding, the services too need to invest these and future funds more imaginatively,” said military affairs expert Rear Admiral Sudarshan Shrikhande (retd).
Defence ministry should ‘strongly press’ for more funds, says Parliamentary panel
No @GuynextdoorDefence ministry should ‘strongly press’ for more funds, says Parliamentary panel
The panel has underlined need to provide budgetary support to the armed forces.
Updated: Dec 24, 2019 07:58 IST
By Rahul Singh
India’s defence budget for 2019-20 stands at Rs 3.18 lakh crore. This includes a capital outlay of just Rs 1,03,394 crore that is not enough to upgrade capabilities and more money is required to avoid a funding crisis. (PTI)
A parliamentary panel has asked the defence ministry to “strongly press” for additional funds from the finance ministry to enable the military to buy new equipment and also pay for weapons and systems it has already contracted to purchase, at a time when the armed forces have projected a combined requirement of almost Rs 1 lakh crore more under the capital head for 2019-20.
In a series of reports on demands for grants of the defence ministry for 2019-20, the Parliamentary standing committee on defence on Monday underlined the need to provide adequate budgetary support to the armed forces for powering different modernisation programmes and also pay for committed liabilities or procurements already made in the previous years.
India’s defence budget for 2019-20 stands at Rs 3.18 lakh crore. This includes a capital outlay of just Rs 1,03,394 crore that is not enough to upgrade capabilities and more money is required to avoid a funding crisis, said three senior military officers asking not to be named. The additional money sought by the army, navy and air force almost equals this year’s capital expenditure.
Measured against the country’s GDP, India’s defence spending currently stands at around 1.5% of the GDP, the lowest in decades. Several experts have argued that India should spend 3% of its GDP to build military capabilities to counter a combined threat from China and Pakistan. In written submissions to the parliamentary panel, the defence ministry said the requirements projected by the three services had been forwarded to the finance ministry for “favourable consideration”.
“While allocating funds, the ministry of finance analysed past absorption capacity of the services and the pace of expenditure in the current financial year. The committee understood that if this logic was applied, there was no reason not to allocate requisite budget for the forces as for the past few financial years they had been able to fully utilise the funds allocated to them at the revised estimates stage,” the panel said.
The armed forces have so far spent over 90% of funds on modernisation and committed liabilities, said the first senior officer. “Under the defence services estimates, committed liabilities constitute a significant element in respect of the capital acquisition segment, since one project may span several financial years. As such, it is important to track the element of committed liabilities, which hold first charge on budget allocation. The committee found the shortage baffling, as these are payments towards procurements made in previous years,” the panel said, recommending that allocation as promised should be disbursed for committed liabilities. On December 3, navy chief Admiral Karambir Singh highlighted that the navy needed funds for pursuing modernisation programmes as its share of the defence budget had declined from 18% to 13% during the last five years. The capital expenditure of Rs 23,156 crore earmarked for the navy isn’t sufficient to meet requirements and the service needs at least Rs 20,000 crore more, said the second officer.
Likewise, the capital expenditure of Rs 39,300 crore earmarked for IAF in this year’s budget is not enough and it requires an additional Rs 40,000 crore to upgrade capabilities, he added.
The army is seeking additional funds as the Rs 29,461 crore earmarked for the force fall short of its needs, said the third officer. Experts agree that the military needs more money. “A higher outlay is necessary for the armed forces to start becoming future-ready. While it is axiomatic that this will need more capital funding, the services too need to invest these and future funds more imaginatively,” said military affairs expert Rear Admiral Sudarshan Shrikhande (retd).
Defence ministry should ‘strongly press’ for more funds, says Parliamentary panel
This headline doesn't mean that if the Union Ministry of Defense applied 50 Pa (Pascal) of pressure on the GoI , they need to up it to 100 Pa.