In the run-up to the Finance Minister’s budget speech on 1 February, a story in the media revealed that the defence services had recorded an unusually slow pace of expenditure of their capital allocations. According to the report, the Indian Army had spent just about 40% of its capital budget in the ongoing financial year, with the Indian Air Force managing a figure of around 70%. Only the Indian Navy has achieved 90% spending of its capital outlay.
The Army’s slippage in spending came as a surprise, because it has, for some time, been projecting a requirement for capital budgets much higher than its normal allocation. Last year’s defence budget had even allocated additional capital funds for the purchase of new arms and equipment. That, however, appears not to have helped.
In the shadow of the COVID-19 pandemic, the Army’s procurement plans seem to have suffered, with delays in the execution of contracts and interruptions in payments and delivery.