July 21, 2012: The Indian Army has been trying to modernize its armed forces, particularly its army, for the last decade. India spends about $48 billion a year on defense, and the military is asking the government for $182 billion, over the next five years, just for modernization. This would nearly double India's defense budget and the generals are not likely to get all they want.
The army wants a lot of stuff specifically for dealing with China (which currently spends three times as much as India on defense). Thus the request for $12 billion to form two mountain divisions, to deal with Chinese claims on Indian territory high in the Himalayan mountains. The military also wants $5 billion to build more roads and military bases in remote territory, near Tibet, that China claims as its own.
The army wants $8 billion to supply the troops with enough night-fighting equipment to equip all combat units and armored vehicles. The army also wants several thousand IFVs (Infantry Fighting Vehicles) and enough additional aircraft (especially helicopters) to give each of the 13 Army Corps its own aviation brigade. In addition to new threats from China, there is the continuing threat from Pakistan.
If there is going to be a war, the army admits that its stocks of ammunition (especially tank and artillery shells) is too small and out-of-date. That will cost over $5 billion to remedy. Ammo needs include a lot more of missiles (anti-tank and anti-aircraft).
The government is reluctant to spend all of this money because of the many military procurement disasters in the last two decades. Most involved bribes and other forms of corruption. Officially, the government is all over this sort of misbehavior, but the reality is that there are still a lot of procurement officers and officials who cannot be trusted.