Allocation of Defence Budget for Modernisation

Ministry of Defence
Ministry of Defence

Around 31% of the total allocation from defence services Budget estimates has been allocated for modernisation i.e. Capital Acquisition of Armed Forces.

Internal Audit of defence expenditure is routinely conducted by the Defence Accounts Department (DAD). Reports of this Internal Audit are shared with the concerned Services/ Agencies. Responses received are examined and Internal audit conclusions arrived at, thereafter necessary action is taken as and when required.

Government constantly reviews the security scenario and accordingly decides to induct appropriate defence equipment to keep the Armed Forces in a state of readiness to meet any eventualities and remaining equipped with modern weapon systems. Modernization of Armed Forces is a continuous process based on threat perception, operational challenges, technological changes and available resources. The procurement of defence equipment under the ‘Capital’ head is made as per Defence Procurement Procedure (DPP) which contains timelines for completion of procurement process. There has been a thrust on indigenous manufacture of defence equipment through the collaborative efforts of Defence Research & Development Organization (DRDO), Defence Public Undertakings, Ordnance Factory Board and the Private Sector.

Pendencies in procurement cases can occur due to several reasons, such as insufficient and limited vendor base, non- conformity of offers to the Request for Proposals (RFP) conditions, field trials, complexities in contract negotiations, stakeholder consultations, lead time for indigenization etc.

During the last three financial years (i.e. from 2013-14 to 2015-16), 150 contracts have been signed with Indian public sector vendors, Ordnance Factory Board (OFB), Indian Private sector vendors for Capital Procurement of Defence Equipment such as Ships, Frigates, Missiles, Rockets, Simulators, Tanks, Aircrafts, Helicopters and Radars for the Armed Forces.

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