Capex allocation and Defence preparedness
Text: Adarsh Kavungal Images: Various Sources Illustration: Jithin Mohan
Surgical strikes of 2016 by the Indian Army deep across and along the Line of Control was a turning point in the history of Indian geo politics post 1971 and 1998 Nuclear tests. Prime Minister Narendra Modi and BJP promised in their election manifesto about their resolve to have a strong posture against external enemies. The decision to appoint General Bipin Rawat as the Chief of Indian Army, the man behind the surgical strikes in Myanmar should be seen as the bugle call of Indian intention and posture in the near term.
Chinese intentions on how they plan to deal with India, a regional rival and competitor is absolutely clear for every China- Analyst. China tested Nuclear devices for Pakistan in their Lop Nor test range with the sole purpose to counter India. The Chinese plans to pin India and its ambitions firmly within its territorial boundaries and not allow space for India to realise her true potential either geo politically or economically. It is often said; the Chinese will try to fight the Indians to the last Pakistani if possible. The Indian economy is one of the few bright spots out there though demonetization will have its dampening effects for the coming year and half. While there hasn’t been any significant increase in the revenue for the government, the least expected out of the current government was status quo, were the current GDP to Defence budget ratios were to be maintained.
Defence Budget, 2016-17 and 2017-18
The problem with statistics is that sometimes it hides more than it reveals, India’s defence budget this year is exactly that. Indian Parliament nor the Indian media have given the adequate amount of space and consideration that is required for the matters which concerns the defence of the world’s largest democracy. One could argue it should be the hottest topic in media and the budget session in the Parliament. Take into account that we live in a nuclear flashpoint, with an unstable Pakistan on one side and ambitious geo political bully that is China on the other side, defence budget should have been analysed for days.
Defence Budget, 2016-17 and 2017-18
The Finance minister announced during his Budget presentation – Ministry of Defence Budget of Rs.3, 60,000 crores. A significant portion of this amount; Rs. 85,740 crores will go for pensions and Rs. 2,74,113.2 is the actual money spent on the defence of the nation. A meagre Rs. 86488 Crores is allocated for Capital Expenditure. On further analysis a decline in capital expenditure allocated to Navy and Army, while there is a slight increase for the Air Force on account of the Rafale fighter jet purchase from France. The current share of Indian defence budget to GDP is the lowest India has had in 60 years. 1956-57, couple of years before the humiliating defeat at the hands of China was when our defence budget last stood at less than 1.65% of the GDP. The world average for Defence budget to GDP stands at 3%, USA spends 4.5% of its GDP, Pakistan hovers around 5% and China at 2.3%. Over the past 6 years the defence budget of India has fallen from 2.1 % to 1.56% of the GDP in 2017-18, while the Indian global ambitions and threats have grown many manifolds.
Along the same time line; Islamabad and Beijing have consistently increased their defence budget over the last 10 years, in addition Pakistan has got American and Chinese Military aid most of which does not reflect on their official budget. India as it stands is facing a combined threat of $250 billion spent on both sides of the border in cohesion and with a consistent strategy, while India spends $50 billion odd. Chinese are rapidly progressing on all fronts, they are creating infrastructure and military equipment is modernized at a fast pace. Consider this, Indian Aircraft carrier currently being constructed in Cochin, is 5 to 6 years late, Chinese on other hand more or less has completed their second aircraft carrier at their Dailin Shipyard in a mere 3 years. Chinese have immense capability to absorb technology and extremely capable of reverse engineer most equipment they import. Massive changes have happened on their training and doctrine, while Indian government and Armed Forces have not even taken a decision on a Chief of Defence Staff.
Adarsh Kavungal is the General Secretary, Indira Gandhi Educational Trust and Managing Director, Titan Educate. He has also been the State Organizing Secretary, Kerala CBSE Schools Managements Association.
The defence budget grew 7.7% in 2015- 16 and fell to a paltry 0.96% increase last year and 6% increase in the current 2017- 18 budget. Defence budget when put against total Government expenditure has fallen .4% from last year. Minister Jaitley announced an increase in the capital expenditure component of the defence budget, while in reality it has fallen 1.7% from its share of the Defence budget 2016-17, sounding death knell to many capital acquisition plans of the Armed Forces.83% of this budgeted increase of 6% will go into revenue expenditure and capital acquisitions will only get 17%, this is what the Finance minister didn’t highlight. Indian Armed Force’s primary objective is not to be a job creator or be an avenue for the government to distribute salaries, but it is to protect and defend the interests of India as a professional war fighting force. If not equipped with required Guns, bullet proof jackets, Battle tanks, Ships and Aero planes, Indian military will fail in its primary objective. This is the first timeever Pay and Allowances form the largest component of expenditure and Stores-Modernization has fallen below pay in Expenditure (percentage wise) The Indian Military as we speak is facing serious capability gaps and near complete obsolescence. Ideally the Armed Forces should be working with 30% cutting edge technology, 40% present day technology and 30% obsolete technology, but the reality is Indian military is facing high percentage of obsolescence.
In March 2012, the current minister Gen. V.K.Singh and then Chief of Army announced “ Nearly 97% of the Indian Air defence equipment are obsolete”. No significant accusation has been made to arrest this very serious issue in the past 4 years. The Medium Role Combat Aircraft – Indian Air Force was published a tender for 189 aircrafts in 2001 and selected French Rafale in 2013, the current government reduced that to 36 aircrafts and has floated a new tender for an undisclosed number of single engine fighter aircrafts. All along this while Indian Air Force fighter jets are crashing in an alarming rate. They are also being retired as they have become too old, too costly and too unsafe to fly. The military is filled with many such examples of apathy, neglect and unwise use of money. Indian Armed Forces were unable to utilize the capital budget last year (89% utilization) and has consistently returned funds back to Ministry of Finance and Ministry of Defence over the last decade.