India, Jan. 11 -- Insufficient modernisation funds provided by the Central government have "dashed the Army's hopes" as they would not be able to cater to their ongoing procurement projects, a senior Army officer has told a parliamentary panel.

The issue of lack of funds for the services has come up at a time when the state-run companies like Hindustan Aeronautics Limited (HAL) have had to take loans to pay salaries to their employees. The report did not name the Army officer.

The officerchief claimed: "Marginal increase in capital in the budget allocation for the Army has dashed all hopes. The fund allocation is barely enough to counter the inflation level, and did not even cater to the affect of the increased tax burden."

"The fund a...