India Cuts its Defense Budget

The Indian Finance Ministry appears to have put a stop to the headlong dash by the country's military to enlarge its defense forces to meet the China challenge, slashing the military budget by US$2 billion this year. The cuts are necessary, officials say, because of economic distress and a ballooning fiscal deficit of 5.8 percent, up from 4.1 percent in 2011. But the fiscal adjustment, which has raised eyebrows, might not only have an impact on the country's defense preparedness but also throw off kilter vital acquisition projects of aircraft, choppers, howitzers and missiles.

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