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Lok Sabha
The then Finance Minister in his budget speech while presenting the Interim Budget 2004-05 in February 2004 had announced the setting up of a non-lapsable Defence Modernisation Fund of Rs 25000 Crore. However no budgetary allocations were made for the said fund.
For operationalising the Defence Modernisation Fund the Ministry of Defence with the approval of the Ministry of Finance drew up a detailed accounting procedure and processed it for approval of concerned authorities including the Comptroller and Auditor General of India.
While formulating these modalities, it emerged that the utility of Defence Modernisation Fund in addressing the basic issue of assured availability of funds will be rather limited. Hence it has been decided not to pursue the proposal for the present.
This information was given by the Defence Minister Shri Pranab Mukherjee in a written reply to Shri Hiten Barman in Lok Sabha today.
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