Consequently, the revenue-to-capital ratio has shrunk to the detriment of the latter and the pension graph is illustrative. The inventory gaps in the Indian military are YUGE (to use a Trump expression!). In FY 2015-16, the MoD returned more than Rs 13,000 crore from the capital head as unspent. In February 2015, it was Rs 61.63 to the dollar; it is now Rs 67.4. Thus the double-whammy is that the rate of induction of new inventory by the Indian military is impaired by both under-utilisation and a weakening rupee.If these structural constraints are not holistically addressed, the modernisation of the Indian military will be trapped in a fiscal straitjacket.(C.

Source: Economic Times February 07, 2017 06:56 UTC