It said the capital allocation to the Army in the budget estimate was Rs 25,254 crore against a projection of Rs 42,500 crore while the Navy was given Rs 37,841 crore when the demand was Rs 51,065 crore.

Similarly, the Air Force was allocated Rs 59,672 crore against its projected requirement of Rs 92,496 crore for the year 2017-18, leaving a major shortfall, the panel said.

The panel, headed by Maj Gen (retd) B C Khanduri also mentioned that Rs 6,170 crore remained unspent by the Army during the first four years of the 12th five year plan (2012- 17), and called the under utilisation of the funds an indication of an "apathetic" attitude towards modernisation of the force.

The committee said fund crunch was impacting the three forces and it may even hit operational preparedness of the forces. It expressed unhappiness over the "customary nature" of the reply by the defence ministry to these critical issues.

"A budget deficit of nearly 25 per cent will indeed have cascading affect on operational preparedness and technological upgradation of the Navy," it said referring to the inadequate allocation to the Navy.

The defence ministry, in its reply to the panel, said it was taking up the matter of funds shortage for the three forces with the finance ministry so that additional money can be given to them.

It said according to the IAF, 14 squadrons of the MiG 21, MiG 27 and MiG 29 are due for retirement in the next 10 years which will bring down the fighter squadron strength to 19 by 2027 from the current 33.

The strength may further reduce to 16 by 2032, it said, adding that the panel was informed about plans to induct new fighter jets in the coming years.

Referring to the modernisation plan of the Navy, the committee expressed deep disappointment over delays in several mega procurement projects including induction of Scorpene submarines and various war ships.

"It is disheartening to find out that repeated delays have become an inherent part and parcel of the projects. Such an approach is needed to be rectified and strict compliance to the stipulated timelines is the need of the hour," the committee said.

The committee asked the defence ministry to address the delays with seriousness and find solutions.

Talking about the delays, it also mentioned the delay in the delivery of naval offshore patrol vehicles due to the change in management of the supplier company and its takeover by the Reliance Defence and Engineering Ltd.

It also talked about series of accidents involving naval platforms and said accidents are a continuous feature in the Navy.

The shortage of arms and ammunition being faced by the Army also figured in the panel's report. It said the Army is facing a shortage of 8,370 officers.

The committee also spoke about the need for enhancing security at defence installations across the country following the Pathankot and Uri terror attacks.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)