Parakram cost put at Rs 6,500 crore

The cost of Operation Parakram, the name given to the deployment of the three defence services after the terrorist attack on Parliament on December 13 last year has shot up to upwards of Rs 6,500 crore (Rs 65 billion).

Earlier this month, Pakistan President Gen Pervez Musharraf had estimated that for the Pakistan the cost of military deployment in response to Operation Parakram was approximately $1.4 billion.

The Army is the biggest contributor to the expense. Latest figures collated by Army Headquarters indicate that the cost of mobilisation of 500,000 troops including pay and allowances, field allowance for one year and transfer grant alone is Rs 700 crore (Rs 7 billion).

The wear and tear cost of equipment adds up to Rs 1,300 crore (Rs 13 billion). The depletion of mines, ammunition and warlike stores is around Rs 550 crore (Rs 5.5 billion).

Transport and fuel costs together add up to Rs 850 crore (Rs 8.5 billion). And compensation paid to civilians for loss of property, life, crops, etc is around Rs 350 crore (Rs 3.5 billion).

The figure adds up to Rs 3,860 crore (Rs 38.6 billion) and doesn't include the cost of withdrawal of troops (estimated at around Rs 500 crore) and the cost of demining one million mines for which new demining equipment had to be bought.

Nor does this figure include the cost of deploying (and redeploying) the Navy, the Indian Air Force and the Coast Guard, which is estimated to be another Rs 1000 crore (Rs 10 billion).

This expense is likely to push up the size of the defence budget and could put the finance ministry, which is relying on money returned by the defence services, to make the budget figures add up.

The services were expecting that with the setting up of the Defence Procurement Board and changes in procurement systems, they won't have to return any money to the finance ministry.

Last year, funds returned unutilised by the defence services to the tune of Rs 6,000 crore (Rs 60 billion) had plugged a major hole in the general Budget.

This year too, because of the effect of the Tehelka scandal, spending was expected to be well below projections.

However, Operation  Parakram might fill the expenditure gap caused by lack of spending by the services.

Given the Finance Minister Jaswant Singh's repeated assertion that he was for "sensible" defence spending, the increase in defence expenditure should not be more than the mandatory 5-8 per cent, just enough to cover military inflation.