India cuts its defense budget
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India cuts its defense budget

Big shock for a military trying to catch up with the Chinese, writes Asia Sentinel’s Neeta Lal

The Indian Finance Ministry appears to have put a stop to the headlong dash by the country’s military to enlarge its defense forces to meet the China challenge, slashing the military budget by US$2 billion this year.

The cuts are necessary, officials say, because of economic distress and a ballooning fiscal deficit of 5.8 percent, up from 4.1 percent in 2011. But the fiscal adjustment, which has raised eyebrows, might not only have an impact on the country’s defense preparedness but also throw off kilter vital acquisition projects of aircraft, choppers, howitzers and missiles.

The cut, for instance, appears likely to affect the already much-delayed $20-billion MMRCA (medium multi-role combat aircraft) project to acquire 126 French Rafale fighter jets, ministry sources sway.

India began a massive military buildup in 2010 after a November, 2008 attack by Pakistani militants on luxury hotels and other facilities in Mumbai that took 166 lives, and after an admission by military officials that they were unable to retaliate with a full-scale attack against Pakistan because they didn’t have the military readiness to do so.

“New Delhi is in the throes of finalizing important contract negotiations to bolster segments like the artillery, aviation, air defense, night-fighting, anti-tank guided missiles and specialized tank and rifle ammunition. All these will now be pushed to the back burner,” a source told Asia Sentinel.

The Army too, had sought a 30 per cent budget hike allocation for the 12th Plan (2012-17) including upgrading its rapid reaction ground force capability against China by building two specialized divisions in high-altitude areas at a cost estimated at more than US$11 billion. This plan too, will now have to wait.

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