Funds crunch affecting the armed forces CENJOWS 19 Dec 19
https://cenjows.gov.in/article-detail?id=228
Funds crunch affecting the armed forces 19 Dec 19
Late President APJ Abdul Kalam had stated on 09 Dec 2006 to the passing out cadets of IMA, ‘National security is born out of two important components. One is economic growth and prosperity; second is the capability to defend the nation against all types of threats.’ As the economy grows, so would be the availability of funds. Manmohan Singh as the PM had stated while addressing the combined commanders conference in 2005, ‘If the economy grows at 8% per annum, it will not be difficult for us allocate 3% of our GDP for national defence.’ However, this is not the current scenario and the economy is sluggish, barely moving at 4.5%.
Realistically, funds for national security have always been at a premium. The constant ‘guns versus butter’ battle continues, so does the debate on investment in infrastructure to achieve the five trillion economy figure versus allocation for defence. For a long time, allocation for defence was considered as expenditure without returns. The service chiefs informing the nation that most defence revenue expenditure goes into developing local economies have fallen on deaf ears.
With a decline in the economy, funds for the armed forces would also reduce. Thus, there would always be an uncertainty in the quantum of funds which would be allocated as against the demands of the forces. Over the years, many defence programs have had to be shelved for want of funds. Such was the situation that service heads had to inform the government that they even lacked funds for carry forward liabilities, ignoring fresh and immediate procurements. Forces were compelled to shift funds from revenue expenditure to enhance preparedness, leading to deterioration in infrastructure.
Simultaneously, threats to the nation are continuing to increase, especially as we have two nuclear powered neighbours, who operate in collusion. China is aware that propping Pak’s military capabilities enhances India’s security concerns and financial commitments, which more than suits it.
Development of military capabilities is also a time-consuming process. Demands for capabilities being processed at present would only see the light of day at least a decade ahead and the capability would continue in service for another three decades. Choices being made today cannot be wrong and must be capable of being able to meet the challenges decades ahead. Hence, a correct analysis and selection is paramount.
Procurement procedures are complex and along with it is the uncertainty of availability of funds. Thus, there has been a regular demand for a Non-Lapsable fund for defence and national security. This was first proposed in 2003 by the parliamentary standing committee on defence, however, has yet to see the light of day. Introducing this would ensure that equipment in different stages of the procurement procedure are not delayed for want of funds.
For any nation’s armed forces, the ideal mix in equipment is one-third each of state of art, current and obsolete. In India the ratio is skewed towards obsolete with over 65% in that category. Each service has been considering itself as primary and placing its own demands for equipment. HQ Integrated Defence Staff (IDS), raised for joint planning and procurement has failed to segregate demands on priority as it lacked a Chief of Defence Staff (CDS) as its head.
This has been left to the defence ministry and the defence secretary. As Admiral Arun Prakash, the former chief of naval staff had stated, ‘there is rarely a meaningful debate amongst the uniformed professionals (the Armed Forces) because of the unstated understanding amongst the Chiefs that “if you don’t interfere with my plans, I’ll not comment on yours”.’ It was in this scenario that the armed forces were operating.
There was also an outdated financial management system adopted by the Ministry of Defence (MoD). It followed an overcentralized financial control system adding to delays in every process. Admiral DK Joshi resigned as the Chief of Naval Staff 0n 26 Feb 2014, taking responsibility for a series of naval accidents, the most prominent one being the fire on board the Submarine, INS Sindhuratna. The causes were largely due to non-availability of stores which the armed forces were restricted from purchasing.
On his resignation Admiral Joshi stated, ‘While professional competence, accountability, responsibility is with the service, that is not the case with authority….For example, change of submarine batteries, which are available indigenously or for commencing refits and repairs of ships, aircraft, submarines in Indian yards, the service (Navy) does not have that empowerment (to purchase them).’
Within the domestic arena, apart from the involvement of few private sector players, the major domination is by government owned enterprises. Government enterprises have been charging at will and have at times even been costlier than foreign vendors. Nirmala Sitharaman, as the defence minister, had to order a board to evaluate the cost of Tejas aircraft as the figure quoted by HAL was exorbitant.
It is hoped that with the appointment of a CDS, there would be some streamlining in the process being followed for procurement by the forces. It would result in appropriating the funds based on essential requirements, rather than leaving it in the hands of an unqualified MoD. This may only happen provided the organization structure of the MoD changes and the CDS has a direct vertical link to the defence minister, bypassing babu’s of the MoD.
There is no doubt that funds would always be in scarcity as the same pie has to cater for social security and infrastructure development, alongside catering for national security. However, setting correct systems, including creating a non-lapsable fund, involving the private sector and correct pricing by government concerns can lead to better utilization of the defence budget.
Further giving requisite powers to the CDS to evolve a joint procurement plan based on emerging threats, laid down timelines and likely available of funds would bring about transparency and result in optimizing the budget allocations. The complete system needs a revamp and it must be done at the earliest.
About the Author
Maj Gen Harsha Kakkar
Retired Major General Indian Army