The Army also informed the panel that it does not have adequate resources to even undertake the construction of strategic roads near the Sino-India border.
The Army has said it was reeling under severe fund crunch and struggling to even make emergency procurements when there was a real possibility of a two-front war and both China as well as Pakistan were carrying out modernisation of their defence forces in "full swing".
The Army told a parliamentary panel that the funds allocated to it in the defence budget for the next fiscal is insufficient to deal with various security challenges facing the country including from a more assertive China along the northern border and from a hostile Pakistan on the western frontier.
The Army's frustrations over inadequate allocations of funds in the defence budget figured in a report of the Standing Committee on Defence which was tabled in Lok Sabha today.
Speaking at a think tank, Army chief General Bipin Rawat talked about China's military might and said the country understood the importance of ramping up defence expenditure in sync with its economic prowess.
Vice Chief of Army Staff Lt Gen Sarath Chand said inadequate allocation of funds will hit the Army's modernisation plan when Chinese military was competing to reach the level of the US.
"The threat perception has been ever increasing. The last one year has seen various occurrences of external strife and internal dissidence. Just to highlight a few, we have the Doklam issue going on and China has become increasingly assertive," he said.
Lt Gen Chand said, "We have seen more and more patrolling and transgressions. Activities in Tibet has also increased over a period of years whether it is the quantum of troops or whether it is the number of personnel undertaking the exercises and also the level of exercises."
Referring to the situation along the western border, he said Pakistan has been increasing cross border firing to support the militants.
He said 68 per cent of the Army's equipment is in the 'vintage category', adding fund crunch will also impact the serviceability of the existing equipment and may even affect payment of instalments for past purchases.
Talking about the new procurement policy, delegation of financial powers to Vice Chief of Army and several other initiatives towards modernisation of the armed forces, Lt Gen Chand told the panel that "the Budget of 2018-19 has dashed our hopes and most of what has been achieved has actually received a little set back."
He said, "Allocation of Rs 21,338 crore for modernisation is insufficient even to cater for committed payment of Rs 29,033 crore for 125 on-going schemes, emergency procurements," he said, adding "Committed liabilities of 2017 which will also get passed on to 2018 will further accentuate the situation."
Referring to the regional security scenario, Chand said the possibility of "two front" war is a reality and the country needs to pay attention to modernisation of the Army.
The Army also informed the panel that it does not have adequate resources to even undertake the construction of strategic roads near the Sino-India border.
The Vice Chief of Army Staff also referred to daring terror attacks on military installations in Uri, Pathankot, Nagrota and Sunjwan Cantt in Jammu and said the defence forces must get their dues.
"Peace in the neighbourhood has also been slightly affected by the recent incidents in Maldives. Overall, we have a disturbed situation and all the more important is that the defence forces should get their due," he said.
The Army informed the panel that it had identified 25 projects under the Make in India initiative but there was not adequate budget to support them. "As a result of which, many of these may end up foreclosed."
On its part, the Parliamentary Standing Committee, headed by BJP MP B C Khanduri, also came down hard on the government for inadequate allocation of financial resources to the armed forces.
"Keeping in view the increasing threat perception, which includes various occurrences of external strife and internal dissidence such as Doklam, increased external activities in Tibet over a year, rampant cross border firing, militant activities etc., the current budget is not supportive to the inevitable needs of the Army," the panel said.
It also expressed concern, saying a whopping 68 per cent of the equipment of the Army is in the vintage category while just about 24 per cent is in the current state, and eight per cent in the state of the art category.
The panel said it took a series of attacks and numerous casualties to delegate financial powers to the Vice Chief to spend Rs 14,097 crore for strengthening 'perimeter security'. "But for the attack, it's quite possible that funds for strengthening perimeter security may not have been sanctioned for quite some time to come," it said.
It said while the defence ministry has delegated powers to the Vice Chief of the Army to spend a little over Rs 14,000 crore towards security related issues, there is no separate allocation made for it.
"The committee opine that the security of the Nation is paramount and safety of those defending the country cannot be left in a state of abandonment.
"The Forces must be capacitated in maintaining a robust and effective response mechanism to counter emerging threats," it said.
The Parliamentary Standing Committee also came down hard on the government for delays in carrying out modernisation of the Indian Air Force and the Navy.
PTI