An alarming fall

Defence Budget 2019-20

The defence budget of a nation is based on the threat perception, and this requires envisioning the strategic security landscape, having a national security doctrine in place, a future-ready modernised force and a decisive political will to empower and generate this capability through supportive budgetary allocation and decisive strategic direction.

The strength of a country is known from its economic and military power. The capital budget for defence acquisitions is not sufficient to meet the committed liabilities or to pay for signed contracts. New contracts for meaningful capabilities thus remain a dream. Can we fight and win tomorrow’s wars with yesterday’s capabilities, with the lowest defence budgetary allocation — about 1.44% of GDP — since 1962? Does it require another 1962-like debacle for the government to raise the defence budget, like it did in the past? The defence budget before the 1962 war was 1.64%, post-October 1962, it was raised to 3.7% of GDP.

A holistic politico-military transformation is the need of the hour. An effective transformation strategy in our context must tackle six issues: (i) the “bigger the better” syndrome, (ii) the absence of a strategic culture, exemplified by the void of a national security strategy, (iii) the sustenance and capabilities voids, (iv) the quantitative and qualitative imbalance and lack of reforms in the defence budget, (v) bureaucratic decision-making apathy and risk averseness, and (vi) the absence of jointness, led by the glaring void of higher direction by a Chief of Defence Staff (CDS).

Finance Minister Nirmala Sitharaman has allocated Rs 4.31 lakh crore for defence spending (including military pensions of Rs 1.12 trillion) -- the same as in the February 1 interim Budget. As a proportion of GDP, the allocation has steadily inched lower from the 2% mark since 2014-15.

In countries like India, which face significant security threats, the norm is for defence spending to rise at least in tandem with the GDP. Were allocations to have remained at the 2014-15 level of 2.28% of GDP, the military would have gotten an additional Rs 50,640 crore than it has got this year.

Over the last dozen years, the military salary bill has risen six-fold, with swelling manpower numbers compounded by the salary and pension hikes of the Sixth and Seventh Pay Commissions and the One Rank One Pension award of 2014-25. Providing some relief to the military, the finance minister announced Customs duty exemption for the import of defence goods.

Capital allocations, which fund the purchase of new weapons and equipment for modernisation, remains at Rs 1.08 lakh crore, or just a quarter of the total defence budget. The Indian Air Force (IAF) has again been allocated the bulk of the capital budget — Rs 39,303 crore, or almost 37% of the total.

Yet, this is unlikely to suffice, with the IAF having to make annual payments for the Rafale fighters, which will start joining the fleet this year, and for the Sukhoi-30MKI and Tejas fighters on order and upgrades to the Mirage 2000 and Jaguar fleets.

The 1.26 million-strong army, which includes 85% of the military’s manpower and is in combat round the year, has been allocated Rs 31,815 crore, or 29% of the modernisation budget. The 83,500-strong navy has been allocated Rs 25,656 crore for modernisation, or about 24% of the capital budget. This includes Rs 2,500 crore for the Coast Guard. Navy planners will struggle to fund the planned buy of six conventional submarines and a second indigenous aircraft carrier. Payments are also being made for the first indigenous aircraft carrier, INS Vikrant, which the Cochin Shipyard promises to deliver by 2021.

Unfortunately, Defence Minister Rajnath Singh cannot do much. He cannot reduce 82% of the army’s total allocation (which is 55% of the total defence budget and the highest amongst the three services) meant for pay and allowances of a 13 lakh-strong force. This is because the government has approved army chief General Bipin Rawat’s hybrid warfare strategy (focussed on counter-terror operations and land warfare) with humongous manpower commitment.

Of 1980s vintage, this war-fighting strategy will not win the next war with either Pakistan or China. China is now ahead in technology and doctrinal thinking. Pakistan — banking on the People’s Liberation Army’s (PLA) assistance because of their common commitment to the China-Pakistan Economic Corridor (CPEC) — could well spring operational surprises in a war.

Surprisingly, Rajnath Singh has no control over capital allocations. By creating the Defence Procurement Committee (DPC) on April 18, 2018 under National Security Adviser (NSA) Ajit Doval, the defence ministry’s principle function of procurements and planning was brought under his wings. Since this suits the government, the capital allocations – to be decided by the NSA – would not help in war-preparedness.

Thus, we must mostly expect emergency purchases to make up for tactical-level war deficiencies like stand-off weapons and specialised ammunition for the army, navy and air force, which can be used for the odd, politically expedient cross-border military strike. This is the consequence of the 2019 Balakot airstrike and the 2016 surgical strikes, both of which created a positive perception within the country and helped the government win the 2019 general elections.

Ironically, most analysts who seek war-fighting reforms to balance diminishing capital allocations miss two points: one, the creation of the DPC under the NSA brings operational acquisitions directly to the prime minister’s attention; two, there are numerous contractual liabilities for acquisitions calling for attention at the highest level, a case in point being the $5.4 billion S-400 air defence missile system, which commits Russia to start delivery in 2022.

For this to happen, production should begin now, which in turn requires India to pay the agreed first tranche. This has not happened yet. Who better than the DPC to get the wheels rolling on matters like these?

(The writer is defence analyst and a commentator)