Implications of the current defence budget (English version) Amar Ujala 07 Feb 19
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Implications of the current defence budget (English version) Amar Ujala 07 Feb 19
The finance minister, Piyush Goyal, announced a defence budget of Rs 3.18 Lakh Crore in his budget speech. His announcement, playing to the galleries, stated that for the first time the budget had crossed the 3 Lakh Crore mark, leading to loud applause. As the applause died down, the reality began to sink in. The budget, like its predecessors, is nothing to write home about.
The increase in the budget since the last financial year was marginally over 3%. However, with inflation pegged at 3.6%, it would be no better. As compared to the percentage of GDP, this was even lower than the last at 1.6%, while the demand has been for around 2.5-3% of the GDP. The world average in percentages of GDP for defence vary between 2-2.5%. Pakistan’s budget is 2.36% and China’s is 2.1% of its GDP (the Chinese economy being five times larger than ours).
The only small silver lining has been an increase in capital share of the budget by 10%. This implies that the overall funds earmarked for modernization of equipment and infrastructure are up by 10%. What has not been stated is the amount under pending liabilities. These are figures to be paid this year for purchases of previous years. Only by removing this, would the true figures for modernization be clear. Realistically, the figures are bound to be low.
The strength of the military, its equipment profile and its infrastructure depend on the threat which the nation faces. The budget is meant to cater for maintaining the ‘force in being’, regularly upgrading its equipment profile and planning procurement for emerging threats. In all militaries, the ideal ratio of the equipment profile is meant to be 33% each of state of art, current and vintage technology. The Indian armed forces, on the other hand hold an equipment profile comprising 8% of state of art, 24% of current and 68% of vintage.
India as a nation has two nuclear powered adversaries (Pakistan and China), both eyeing Indian territory. India, on the other hand has no external territorial designs. Their collaboration and possible joint employment of force has compelled Indian defence planners to consider a two-front war as a worst option. Its current force profile is based on this assumption. Only by being a strong military and economic power, can India prevent them from being adventurous. Hence, the Indian armed forces can never let their guard down.
There have been discussions that maximum amount catered for in the budget is earmarked for salaries and pensions of the army, which is the largest and must reduce in strength. However, critics miss the wood for the trees. Firstly, pensions are not part of the budget. The pension budget, although separate, also includes defence civilians, who though about 25% of the strength, consume over 40% of the pension budget. The reason is that the soldier serves the minimum and retires earliest, hence ends up with a low pension, while every civilian employee serves till 60, ending up with a much higher pension. Salaries also follow the same pattern.
Secondly, only with introduction of technology can manpower savings come about. However, even this has a limit. Defences along the borders on both fronts must be held in strength, to prevent the enemy from exploiting gaps. In addition, forces are essential for launching operations. Where possible, the same is being done. More important is to reduce the strength of the large civilian cadre paid from defence estimates.
Thirdly, the defence budget is not for the armed forces alone. Within this budget are civilians paid from defence estimates, the figure being about four lakhs, maintaining defunct ordnance factories and defence PSUs. All these involve a large expenditure, output in return is always questionable. Most of these establishments have neither modernized nor grown and while the present government has decided not to invest in them any further, its staff need to be paid and facilities maintained.
Realistically, no nation can ever become a military power only by importing its military requirements. It must have a strong internal defence base. For decades all defence R and D was entrusted to the DRDO and manufacture to either defence PSUs or ordnance factories. This has now begun to change, and the private sector has waded in. The Indian defence private sector presently in its nascent stage is only capable of manufacturing in collaboration with foreign vendors. It does not possess funds to conduct independent research.
It is for this reason that the armed forces had begun looking at working in collaboration with the private sector by funding research. One essential project was the ‘Future Infantry Combat Vehicle’ of the army. This has been in the pipeline for the last two years. The project was shelved in the last financial year for lack of funds and would be shelved again this year. There have been similar cases with the other two services alone.
India is a developing nation and hence there are multiple demands on the budget. Whilst the nation cannot ignore its social commitments, it needs to be realistic on its national security needs. If it cannot enhance its defence expenditure, then it needs to remove wasteful pockets of expenditure under the defence budget, which includes ordnance factories and defunct PSUs. This alone would enhance funds for modernization.
Historically India has only woken up to defence requirements after a crises. The last was Kargil which was twenty years ago. As time passes, defence takes a back seat. This attitude would only open doors to misadventures by our enemies. The government needs to understand defence requirements and consider a realistic budget. The nation should remember the words of Late President Abdul Kalam, who stated that ‘development and national security go together. One cannot occur without the other.’
About the Author
Maj Gen Harsha Kakkar
Retired Major General Indian Army