Defence Minister Manohar Parrikar on Friday said that $3 billion (around Rs 20,000 crore) of India's money allocated for defence was found unused in a United States account managed by the Pentagon. During a briefing on defence expenditure for 2016-2017, Parrikar said India has been paying the US for weapons, unaware of the money already present in the Pentagon account, which was to be used under the Foreign Military Sales programme, under which the Pentagon buys equipment from US vendors on behalf of foreign governments.
Parrikar added that the money had not been earning any interest either, and was just “lying in the account”, reported Business Standard. The money was finally used in the last 12 months, with the defence minister saying it had saved the government between $700-800 million in foreign exchange.
Parrikar also announced the defence budget for 2016-2017 stood at Rs 3.41 lakh crore, which is around 17.2% of overall government expenditure. Around Rs 12,000 crore was earmarked for new projects in the Rs 78,587 crore budget for modernising the armed forces, The Times of India reported. Regarding the pending contract for India to buy 36 French Rafale jets, Parrikar said adequate money had been kept aside for it, though he was continuing negotiations in order to save money.