Bangalore, Feb 6: India's Defence Minister AK Antony said on Wednesday that the government is set to reduce its defence budget allocation in the next financial year starting on April 1 owing to economic slowdown. He said India, one of the world's biggest spenders on defence equipment, would slash defence imports and put more focus on local production of weapons.
However, the minister, who was speaking at the Aero India event in Bangalore, said New Delhi would not slash its spending on acquiring critical weapons like fighter jets. India buys weapons worth billions from countries like the US, the UK, Russia, Israel and France.
Of Rs 1.93 trillion ($36.35 billion) that New Delhi has earmarked for defence in the current fiscal, around Rs 796 billion would be spent on buying new weapons.
The country's economic growth has considerably slowed in recent times and high inflation and widening fiscal and current account deficits have added to the woes. The government recently said that the economy is said to have grown at 6.2% in the past fiscal year, which is slower than the previously estimated figure of 6.5%.
However, the decision has created quite a few concerns. A number of important defence projects have been affected because of the decision, defence sources said. A top official said no new ventures are being taken, adding the consequences could be serious in times to come.
According to another official, some important projects have already been stalled d owing to corruption charges. He said nobody wants to take any decision nowadays and even the defence minister gives probe orders whenever there is any allegation of corruption. "This hampers work and affects projects," he said.
The slashing of defence funds could also affect the buying of submarines, missiles and modern helicopters and endanger the national security, some anxious observers felt.