Skewed outlay for defence: panel 

Skewed outlay for defence: panel 

Context

Expressing concern over the decreasing share of capital allocation in the defence budget compared with the revenue component, adversely the Parliamentary Standing Committee on Defence said the Defence Ministry should overhaul its planning and budgeting mechanism to ensure “a prudent and equitable distribution of funds to revenue and capital heads”.

MPs’ committee says falling capital allocation will affect modernisation

“Both components are equally important aspects of the budget; however, the committee members are deeply anguished to note that with each year, the ratio of revenue-to-capital outlay is skewed as the budget for capital acquisitions for the services is declining in comparison to revenue allocations, adversely affecting the modernisation process of our forces,” the panel said in its observations.

Based on a report

These observations were part of the report presented in Parliament last week for “action taken by the government on the observations/recommendations contained in the 31st report”.

Ministry’s reply

To the committee’s recommendation in the earlier report, the Ministry replied that while revenue outlay expenditure follows a pattern due to its inherent characteristics, capital outlay fluctuates depending on milestone payments and new accruals, which may not necessarily increase every year.

Revenue Component

The revenue component caters to salary, other recurring expenses, requirement of stores, transportation, revenue works and maintenance and others, while the capital component is for procurement of weapons and systems.