By Staff Correspondent
India’s Ministry of Defence is considering the creation of a Non-Lapsable Defence Modernisation Fund (DMF) to bolster the modernisation of the country’s defence forces. The DMF would supplement the annual budgetary allocations and provide funds for various capability development and infrastructure projects, eliminating any uncertainty surrounding adequate funding. Minister of State for Defence Ajay Bhatt confirmed in a written response to Lok Sabha member Balashowry Vallabhaneni that the creation of the DMF was under consideration. The establishment of the DMF is expected to strengthen India’s defence infrastructure and capabilities, boosting the country’s defence modernisation efforts and ensuring it is prepared for emerging security challenges.
In a strategic think-tank analysis, Vice Admiral Girish Luthra (r) discussed the recommendations made by the Finance Commission of India regarding fund allocation for modernising defence forces and internal security. The Commission, established under Article 280 of the Constitution to recommend the distribution of tax revenues between the Union government and States, included defence modernisation and internal security in its terms of reference, signalling the growing importance of these issues in the national discourse.
The Fifteenth Finance Commission, established in November 2017 and chaired by N.K. Singh, a former bureaucrat and member of parliament, submitted a report that analysed the issues surrounding defence modernisation and made several key recommendations. These included the creation of a dedicated Modernisation Fund for Defence and Internal Security that would provide supplemental support to the annual defence budget, as well as adopting a more realistic and comprehensive approach to planning, which considers the armed forces’ long-term and short-term requirements and the need for timely and adequate allocation of resources.
The report also examined the shortfall between allocations envisaged and funds actually made available, which has been a recurring theme in the defence modernisation process. The report suggested several measures to bridge this gap, including recalibrating the relative shares of the Union and States in gross revenue receipts and identifying specific sources for raising additional funds. According to Vice Admiral Luthra, if the recommendations made in the report are implemented promptly and effectively, they could go a long way in strengthening India’s defence preparedness and enhancing its security.
The Defence Ministry’s deliberations on creating a Non-Lapsable Defence Modernisation Fund represent a positive step in the right direction. If implemented, this could provide a dedicated source of funding that would supplement the annual budgetary allocations and ensure that India’s defence forces are equipped with the latest technology and equipment, making them better prepared for future security challenges.
