Finance Minister Nirmala Sitharaman's stint heading the Ministry of Defence (MoD) in Prime Minister Narendra Modi's earlier government is expected to give her a better perspective of the country's defence needs while finalising the Union Budget 2019. MoD circles hope she will address the grievance that its outlay went down from the previous year in real terms in the interim budget that Piyush Goyal presented while standing in for Arun Jaitley in February.
The allocation on paper at Rs 3.05 lakh crore ($43 billion) was disappointing to many geopolitical observers as the rise from Rs 2.85 lakh crore ($40 billion) in the Union Budget 2018 was only marginal. It meant a cut in the defence outlay when factoring in the rupee depreciation and inflation. That is why they think an ex-defence minister will realise the urgency of fast-tracking the modernisation of the country's defence forces at a time when geopolitical tensions are on the rise.
The fall in the outlay in real terms was surprising to many because the Modi government had changed the terms of the $8.8-billion Rafale deal despite its advanced stage of finalization citing geopolitical urgency. Instead of buying 126 aircraft to be assembled in India, the deal was altered to supply 32 frontline, multirole aircraft in a fly-away condition so that they could be inducted into the forces fast. The generation-4.5 fighters are expected to enhance India's air superiority against both Pakistan and China.
Some defence circles even suggested after the February 27 skirmish over the Kashmir skies with an intruding formation of Pakistan Air Force (PAF) warplanes that a better equipped Sukhoi-30 MKI fighters or Rafale aircraft would have been a deterrent. The unsuccessful Pakistani raid was in the wake of Indian Air Force's (IAF) bombing of Jaish-e-Mohammed training camps in Balakot to avenge the Pulwama terror strike a week earlier.
The recent withdrawal of income-tax concessions to defence veterans by the Central Board of Direct Taxes (CBDT) under Sitharaman surprised many as they expected a more lenient view of the issue from a former defence minister. Sitharaman has in her defence posted on Twitter a letter from the MoD about widespread abuse of the concession by some veterans. Some aggrieved veterans, however, likened the withdrawal of a vital welfare measure in one sweep because of some cases of abuse to throwing out the baby with the bathwater.