The outlay on defence research and development would work out to only 6 percent of the total outlay, when the Parliamentary Standing Committee has recommended it to be raised to 10 percent.The capital outlay for the ordanance factories has been drastically slashed, thereby encouraging the private sector to participate in the manufacture and marketing of ordnance equipment and clothing. The private sector should be encouraged in the indigenisation process of the defence equipment so that the outlay for the ordnance factories is further reduced for the modernisation of the weapon system.Army's decision to suppress the intake of 50,000 soldiers is beginning to pay dividends and its capital outlay for combat equipment has gone up to Rs 2,263.91 crore.

The money thus saved can be used for the modernisation of the armed forces.The expenditure on Rashtriya Rifles, which is entirely deployed for the internal security duties and the counter insurgency, should not be budgeted from the army. It should be debited to the paramilitary forces of the Home Ministry. In spite of all the cuts and the sharp decline of the defence budget, the modernisation programme can still continue under the Indo-Russian deal stretching up to 2010, largely under the barter basis or rupee-rouble trade.

The writer is a defence analyst and commentator