MoD Manohar Parrikar Finds $3 Billion in the Pentagon Bank Account

Defence Minister Manohar Parrikar. (Photo: Reuters)

Defence Minister Manohar Parrikar on Friday revealed that he discovered India was paying the US Department of Defence (Pentagon) for weaponry it was buying under the Foreign Military Sales (FMS) programme despite there being $3 billion remitted in in the Washington account earlier.

In the FMS program, the Pentagon procures equipment on behalf of foreign governments from US vendors like Boeing and Lockheed Martin, reports The Business Standard.

Because of ill-management, or lack of attention to this account, we had slightly less than $3 billion which is piled up in this account, which was not earning any interest. It was just lying there in the account. From somewhere near $3 billion, the account has come down to $1.7-1.8 billion. During last year, we must have paid nearly Rs 6,000 crore from this fund for our committed liabilities. We have saved almost $700-800 million in foreign exchange.

<b>Manohar Parrikar, MoD</b>

Parrikar claims to have made payments to companies that have failed to delivr contracted equipment as well as to having saved up to Rs 3,000 crore by tightening payment norms to Indian vendors including the defence public sector undertakings (DPSUs).

We are strictly monitoring the staged payment clauses, according to contracts. We are not allowing it to be loosely paid, even to DPSUs.

<b>Manohar Parrikar, MoD</b>

The current Budget for the year allocated Rs 77,798 crore for capital expenditure, but the revised allocation brought it down to Rs 65,808 crore. In this case, even if Parrikar has saved Rs 9,000 crore, Rs. 3,000 crore is still left as underspent.

Parrikar clarified that the government has instituted a new way of tabulating the defence budget, which will reflect the invisible expenses thus far.