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SOURCE: SP Guide Publications

A festering Budget crunch is forcing the Indian Navy to cut down on its plan to grow into a 200-ship Navy by 2027. Changes are being made in the Maritime Capability Perspective Plan (MCPP) for the period 2012-2027 to re-align the Navy’s warship acquisition with shrinking Budgets, SP’s Naval Forces has learnt from well-informed sources.

Naval procurement programmes and induction of warships, submarines and aircraft are carried out in accordance with the 15-year MCPP, which provides for a build-up to 200 ships by 2027 from the current force level of about 140. “The 2012-2027 Maritime Capability Perspective Plan for naval expansion – approved by the Defence Acquisition Council – was based on an assurance of a rise in Budgets. But low availability of funds is forcing the Navy to downsize its plans. It has to re-prioritise its inductions in view of the crunch,” sources acknowledged.

But the expansion plans have been compromised by declining budgets. In the current fiscal, the financial allocation for the Indian Navy has fallen to a level below what it was in 2014. In percentage terms, while it comprised 18 per cent of the Defence Budget in 2014-15, the allocation of 45,368.11 Crore for 2019-20 marks a decline to 14 per cent of the total Defence Budget of 3,18,931.22 Crore.

“The 2012-2027 MCPP for naval expansion – approved by the Defence Acquisition Council – was based on an assurance of a rise in Budgets. But low availability of funds is forcing the Navy to downsize its plans. It has to re-prioritise its inductions in view of the crunch,” sources acknowledged.

Sharply illustrating the crunch is the 23,156.43 Crore allocation of Capital funds for the Navy for 2019-20, which falls short of meeting even committed liabilities by about 6,000 Crore.

The Indian Navy is learnt to be seeking an increase in funding to at least 16 per cent of the Defence Budget. A budgetary review had been sought by the Ministry of Defence in November following strong representations by all three services, but there’s no relief so far

The focus of Budgetary allocations has moved away from the priority of a naval build-up at a time when China is rapidly ramping up its naval presence in India’s maritime backyard, and military challenges in the Indian Ocean Region are increasing.

The Indian Navy is learnt to be seeking an increase in funding to at least 16 per cent of the Defence Budget. A budgetary review had been sought by the Ministry of Defence in November following strong representations by all three services, but there’s no relief so far.

The overall shortfall in Capital funds for all three services is estimated to be about 20,000 Crore for the current fiscal. In terms of allocation of funds for Defence as a percentage of the GDP, the current level of 1.56 is the lowest since the 1962 military debacle.