At last MoD sets up “NON-LAPSABLE FUND” as separate head for defence Modernisation
Ministry of Defence has announced it will set up a non-lapsable fund to invest more in the country’s defence modernisation
In 1994, the Commander of Army’s Special Forces had suggested that there should be a separate Sub head fir allotment and expenditure of funds for the Special Forces. This was due to the fact that even when Allotment was not a problem, it’s expenditure as per existing rules for Infantry / Army was a huge problem.
Initially the System reacted if a Sacrilege had been committed. However soon it led to allotment of funds to separate head ARMY COMMANDERS SPECIAL POWER FUND.
Recommendations for a Non Lapsable FUND for Defence Capital Expenditure was made axons ago by various experts both in defence and Finances. Late Shri Parrikar had started working on it, Now finally it has been done.
This year the government had allocated ₹1.60.000 Crores for the modernisation of the armed forces under the February 2023 Union Budget. Now any thing left after 31 Mar 2024 will not lapse.
Expenditure can now be allocated In accordance with the modernisation programs, the Indian defence Forces. Thus main battle tanks, air defence gun systems, missiles, naval vessels, submarines, multi-role aircraft, transport helicopters, and attack helicopters can be added to the existing fleet in a proper manner.
Armed Forces also plan to upgrade its C4I2SR (command, control, communications, computers, intelligence, information, surveillance, and reconnaissance) systems, maritime surveillance, and anti-submarine warfare capabilities.
While the Indian Army’s long delayed Future Infantry Combat Vehicle (FICV) programme is expected to be expedited, the non lapsable funding is also likely to speed up the Army’s Tactical Communication System program.
Indian defence spending likely to increase by 5% between 2024 and 2028, reflecting a compound annual growth rate (CAGR) of 5%. This contrasts with the slow CAGR of 3.6% since 2019 largely due to economic constraints.
The country’s decision to assign more funds to modernisation reflects the global trend of defence expansion as a means of security in an unstable geopolitical landscape.
It also shows that the higher defence management of the Nation comprising the Cabinet Committee Security, the CDS and the National Security Advisor are now on the same page.
