India’s ambitious modernization of its armed forces is likely to be slowed by the federal government’s decision to slash funding for defense acquisition.

A defense ministry official indicates that the government has cut defense spending by about 5% from the allocated 1.93 trillion rupees ($38.6 billion), mainly due to the ongoing economic downturn.

“Several key acquisition plans, including the procurement of 126 combat aircraft for the Indian air force, are expected to be pushed for the next financial year,” the official says.

Under the allocated 1.93 trillion rupees for 2012-2013, 1.13 trillion rupees go to revenue expenditures including salaries and pensions, and 795.79 billion rupees have been earmarked for modernizing the armed forces by acquiring new assets.

The decision to prune capital acquisitions by 100 billion rupees ($1.85 billion) comes at a time when India has announced several large defense acquisition projects, including the more than $20 billion effort to acquire 126 Rafale fighters from France’s Dassault, and a program to buy Apache and Chinook helicopters from Boeing.

The IAF had been expecting to finalize the fighter deal by March. Dassault emerged as the lowest bidder with the Rafale over the Eurofighter Typhoon in 2011.

Defense Minister A.K. Antony indicated recently that his ministry was struggling to get even the allocated budgetary funds for modernization.

“I am struggling to get the budgetary amount,” he said when asked if he was hopeful of receiving the additional 400 billion rupees sought by his ministry to modernize the armed services.

A defense official says the ministry has asked defense forces to concentrate on prioritizing their procurements.

Rafale photo: Dassault