Ministry of Defence may get non-lapsable budget for modernisation

Tribune News Service

Ajay Banerjee

New Delhi, January 30

As Union Finance Minister Nirmala Sitharaman is set to present the Budget on February 1, the Ministry of Defence is likely to get a non-lapsable modernisation budget, a type of fund insulated from yearly changes.

The modernisation budget that is allocated under the “capital head” is meant for new weapons, missiles, helicopters, planes, warships and submarines, among other items used by the forces.

After seeing how resurgent waves of the Covid pandemic can cause supply chain disruptions that impact procurement and, in turn, slow down spending, the pressure of spending money within a financial year can get unreal, a source said, adding that military equipment acquisition took time to fructify and was dependent on several factors.

The 15th Finance Commission for 2021-26 studied the matter pertaining to having a separate mechanism for funding of defence and internal security.

The commission recommended setting up a dedicated, non-lapsable Modernisation Fund for Defence and Internal Security to bridge the gap between projected budgetary requirements and budgetary allocation.

Its report and the point on creating such a fund was accepted in principle by the government, a formal announcement was expected during the Budget.

The commission recommended an allocation of Rs 1,50,000 crore for the first year. The total indicative size of the proposed fund over the 2021-26 period is capped at Rs 2.38 lakh crore.

VP, Speaker discuss Parliament arrangements

Ahead of the Budget session of Parliament starting on Monday, Vice-President and Rajya Sabha chairman M Venkaiah Naidu and Lok Sabha Speaker Om Birla held a meeting at the Vice-President’s house to review the arrangements. The two presiding officers discussed preparations for the session and expressed optimism that all political parties would engage in constructive debates. tns

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