Delhi boosts military spending 17 percent

March 22, 2012 at 6:30 AM
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NEW DELHI, March 22 (UPI) -- India's defense budget took a 17 percent jump to around $40 billion for 2012-13, partly because of major acquisition plans.

"This allocation is based on present needs and any further requirement will be met," Finance Minister Pranab Mukherjee told Parliament.

Around 18 percent of the $40 billion will be for capital expenditure -- buying new equipment up to March 2013, The Times of India reported.

The premier purchase for the military is that of the medium multi-role combat aircraft contract for 126 Rafale fighter jets from French manufacturer Dassault, a deal worth between $10 billion-$20 billion over several years.

Dassault edged its main rival EADS with its Eurofighter Typhoon last month as preferred supplier and the final contract -- India's largest single defense deal -- is expected to be signed by the summer.

The tender, which was issued in August 2007, also was contested by Boeing with its F/A-18E/F Super Hornet, Lockheed Martin's F-16, the Russian-made MiG-35 and the Gripen from Swedish firm Saab.

Despite the boost to spending, the defense budget "remains 1.9 percent of the projected gross domestic product for 2012-13," The Times said.

The increase is "much less than the 3 percent demanded by the armed forces and strategic experts for several years to effectively deter both China and Pakistan. An assertive China recently hiked its defense budget to over $100 billion," The Times report noted.

The Indian air force waits for 75 Swiss Pilatus PC-7 turbo-prop aircraft to train new pilots.

India also is upgrading 51 Mirage 2000 fighter jets.

The army, too, "is desperate to acquire 145 M-777 ultra-light howitzers from the United States for $647 million," The Times said.

Earlier this month the Indian army announced an order for 100 howitzer artillery pieces to be made by the Ordnance Factory Board, in Kolkata, West Bengal state.

Indian Minister of State for Defense M.M. Pallam Raju confirmed the order is for the 155mm, .52-caliber model, a report by the online news site Indian Express said.

Raju also said that bids for artillery guns including towed, self-propelled and ultra-light howitzers will be open to all manufacturers, foreign and domestic under $4 billion artillery modernization program.

India's hike in defense spending might give pause for thought by other, smaller countries in the region, an editorial in Pakistan's Dawn newspaper said.

"The hike in India's military budget gives the wrong message to its neighbors and perpetuates tensions in south Asia" the Dawn article said.

"The neighbors' concerns are not baseless because India is not on the best of terms with them and it has a history of military conflicts with Pakistan and China."

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