{"id":285526,"date":"2024-03-04T18:20:28","date_gmt":"2024-03-04T12:50:28","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=285526"},"modified":"2024-03-05T15:35:03","modified_gmt":"2024-03-05T10:05:03","slug":"non-lapsable-defence-modernisation-fund","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/non-lapsable-defence-modernisation-fund\/","title":{"rendered":"Non-lapsable defence modernisation fund"},"content":{"rendered":"

Source<\/strong>-This post on Non-lapsable defence modernisation fund<\/strong> is based on the article “Non-lapsable Defence Modernisation Fund off govt. agenda for now<\/strong><\/a>” published in “The Hindu<\/strong>” on 3rd March 2024.<\/p>\n

Why in the News?<\/strong><\/h2>\n

The government has abandoned the proposal to establish a Non-lapsable Defense Modernization Fund, citing drawbacks related to its impact on parliamentary scrutiny<\/span> and accountability<\/span>.<\/p>\n

About Non-lapsable defence modernisation fund<\/strong><\/h2>\n
\"Non-lapsable
Source-<\/strong>The Hindu<\/figcaption><\/figure>\n

Background<\/strong>– The 15th Finance Commission<\/span><\/a> has proposed the establishment of a dedicated non-lapsable Modernisation Fund for Defence and Internal Security (MFDIS). The idea behind is to address the disparity between projected budget needs<\/span> and the allocation for defense and internal security<\/span>.<\/p>\n

In 2021, the government placed an action-taken report in Parliament alongside the Commission’s report. The government mentioned that it has “in-principle” agreed to create such a fund in the Public Account of India.<\/p>\n

What is the need for Non-Lapsable Funds?<\/strong><\/h2>\n

1.<\/strong> In India, the defense budget is assigned annually. At the close of each fiscal year, any remaining funds are reverted to the government’s consolidated fund<\/a>. <\/span><\/p>\n

2.<\/strong> Consequently, the defense services miss the chance to utilize these allocated funds for unforeseen needs or future requirements. Establishing a Non-Lapsable Defense Modernization Fund (DMF) offers a solution to this challenge.<\/p>\n

3.<\/strong> Once operational, the DMF would allow the three services to keep any unspent budget allocation beyond the fiscal year’s end<\/span>.<\/p>\n

Why did the government abandon this proposal?<\/strong><\/h2>\n

1.<\/strong> Traditionally, only funds raised through cesses for specific purposes are non-lapsable<\/span>.<\/p>\n

2.<\/strong> Apart from items funded through a cess, deferring today’s allocations with the intention of using them later contradicts the fundamental principles of parliamentary financial accountability.\u00a0<\/span><\/p>\n

3.<\/strong> The government says it is working on a separate plan to explore a special arrangement for establishing a “Non-lapsable Defence Modernisation Fund.”<\/p>\n

Difference between lapsable and non lapsable funds in India<\/h2>\n

1.<\/strong> In India, lapsable funds<\/span> are budget allocations that must be spent within a set time<\/span> or they return to the government’s general funds<\/span>.<\/p>\n

2.<\/strong> Non-lapsable funds<\/span>, however, don’t expire at the end of the fiscal year<\/span> and can be carried over if unused<\/span>. They’re usually earmarked for specific purposes and don’t lapse at year-end for example<\/strong>– funds raised through cesses for specific purposes are non-lapsable.<\/p>\n

UPSC Syllabus- Indian Economy<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Source-This post on Non-lapsable defence modernisation fund is based on the article “Non-lapsable Defence Modernisation Fund off govt. agenda for now” published in “The Hindu” on 3rd March 2024. Why in the News? The government has abandoned the proposal to establish a Non-lapsable Defense Modernization Fund, citing drawbacks related to its impact on parliamentary scrutiny… Continue reading Non-lapsable defence modernisation fund<\/span><\/a><\/p>\n","protected":false},"author":10367,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127],"tags":[11872,10498],"class_list":["post-285526","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","tag-9pm-daily-factly","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/285526","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10367"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=285526"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/285526\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=285526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=285526"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=285526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}