Originally Published 2010-03-19 00:00:00 Published on Mar 19, 2010
The moment finance minister Pranab Mukherjee announced a mere 4% nominal increase in defence budget pegged at Rs 1,47,344 crore for 2010-11, members of Indian strategic community started showing their frustrations.
Does prudence belie reality?
The moment finance minister Pranab Mukherjee announced a mere 4% nominal increase in defence budget pegged at Rs 1,47,344 crore for 2010-11, members of Indian strategic community started showing their frustrations. Some analyses, especially emanating from the government-sponsored research institutions , painstakingly justified the need for larger allocations for national defence.

National defence accounts for 13% of the central government expenditure and if military- and security-related components of other ministries or departments like the ministry of home affairs, department of atomic energy and department of space are taken into consideration, the larger national security considerations actually consume more than 20% of the total expenditure.

Does not this necessitate a debate in Parliament , media or in the academia for the very simple reason that every rupee spent by the government ought to be accounted for?

Complementing the larger aspirations of playing the role of strategic stabiliser at the world stage, India has undertaken an ambitious military modernisation drive that is expected to form one of the core elements of its comprehensive national power calculus.

At a time when major powers are inclined towards ‘capability-based ’ rather than ‘threat based’ modernisation drive, India cannot afford to stay behind in military efforts, thanks primarily to fastpaced technology environment and newer additions to traditional security especially from non-traditional fronts.

Is India spending too much on national defence? If global data are to be believed, the answer is ‘no’ . Consider this: Indian defence expenditure accounts for less than 2% of the global military expenditure which stood at $1.46 trillion in 2009; its resources allocations are way behind its counterparts in the West while it is less than half of what China is spending (although Chinese military budget witnessed a mere 7.8% growth in 2010, pegged at $78 billion).

But, on a pure domestic front, is India spending adequately on national defence? The answer could probably be ‘yes’ . Consider this as well: Indian defence expenditure accounts for less than 2% of its GDP but 13% of its total expenditure. The percentage has come down this year, thanks primarily to fiscal prudence pursued by the current government.

Do the allocations complement our military modernisation drive? The answer is ‘yes’ considering the fact that the current military modernisation programme is largely ‘equipment driven’ . Consider this: India’s capital defence expenditure has witnessed 500% increase in the last 10 years — from Rs 12,000 crore in 2000-01 , it has reached Rs 60,000 crore in 2010-11 . But, importantly, it’s the spending ability of the MoD which has perpetuated ‘unspent syndrome’.

Close to Rs 13,000 crore has been sent back to the central coffer in the last two years as the MoD failed to spend the total allocated money for capital purchases. Some argue that it is the defence minister’s obsession with probity that hinders the current modernisation drive. The problem that most people know but do not avow lies in the institutional mechanisms that are largely responsible for delays in equipment procurement.

Suffice to place three major issues for contemplation . First, institutional mechanisms on matters related to national defence are rigidly structured and operate in secrecy. This needs to change — incremental changes from within through reforms can address this problem. Second, long-term military planning must be carefully crafted in order to make a fine balance between aspirations and reality.

A look at the last five years acquisition scenario suggests that most of the weapons procured or in the pipeline are for replenishment purposes rather than force multiplication. Third, while right sizing the armed forces in tune with modern times is desirable, the need to prune further the ‘revenue’ component, which still hovers around 60-62 % of the defence expenditure, must be carefully worked out in order to achieve the objectives of nurturing a modern flexible fighting force.

In every component, there is scope for pruning, whereby more funding could be allocated toward capital purchases. Even capital expenditure can bring in better value for money if import dependency is reduced through indigenisation processes.

In the final analysis, the defence budget has not seen increase along expected lines, but the problem as cited above lies elsewhere . If the MoD is able to spend what it gets, not only is the allocation reasonably adequate in realistic terms but more could be earmarked in future (notwithstanding the projections made by the Thirteenth Finance Commission for about Rs 3,30,000 crore for the next five years) as promised by the FM on the floor of Parliament. Although this also is a ritualistic statement often recited by the FMS from time to time, but that is another story. Money is certainly not a problem.

The author is a senior fellow in security studies at the Observer Research Foundation, New Delhi

Courtesy: Economic Times, 18 March 2010
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