January 25, 2017

Despite grim trends, hope for more funds to buoy India’s defence

India’s military spending has averaged an annual increase of around 10% during the last three years and the trend of a marginal growth in allocation is likely to reflect in the Union budget this year for the defence sector.

The country’s defence planners and experts believe the spending has not been balanced and falls short of expectations of a military laden with obsolete weapons and equipment ranging from fighter planes, submarines, air defence systems to helicopters.

The military expenditure, excluding defence pensions, went up from Rs 2.29 lakh crore in 2014-15 to Rs 2.58 lakh crore in 2016-17. However, the outlay for modernisation dropped from Rs 94,587.95 crore to Rs 87,209.63 crore during the same period, much to the disappointment of the military that is struggling to scale up its capabilities.

From basic gear such as bulletproof vests, night-vision equipment and assault rifles to hi-tech platforms like warplanes and next-generation submarines, several of India’s defence modernisation programmes are making slow progress and facing funding challenge.

The budget has to cater for making payments for defence deals already signed as well as big-ticket contracts likely to be finalised in the short to medium term, experts said. The government has placed orders worth billions of dollars for new fighter jets, attack helicopters, heavy-lift choppers and ultra lightweight howitzers for which staggered payments have to be made.

India’s defence spending is poor measured against the country’s gross domestic product. The budget for 2016-17, excluding pensions, accounts for 1.72% of the GDP, though experts argue it should be in the region of 3% to counter China’s growing military might.

Speaking at the Hindustan Times Leadership Summit in December, defence minister Manohar Parrikar said he would like India to earmark 3% of its GDP for military spending but added that the target could not be achieved overnight.

Strategic affairs expert Brigadier (retd) Gurmeet Kanwal said at 1.72% of the GDP, the defence budget has been the lowest since the 1962 war with China. “This is grossly inadequate to upgrade the military’s capabilities to deal with the threats and challenges India faces,” Kanwal said.

He said the government must institute a rolling modernisation fund of Rs 1 lakh crore and the defence allocation should be at least 2% of the GDP in the upcoming budget. “It should be gradually raised to 3% if we are to avoid another military debacle.”

Kanwal also flagged concerns about the defence ministry surrendering unspent money almost every year, despite low budgetary allocation. The ministry failed to spend Rs 11,595 crore of its capital budget earmarked for buying new weapons and systems last year, besides over Rs 6,700 crore of the expenditure budget for meeting the military’s day-to-day expenses remained unutilised.

Lieutenant General DB Shekatkar (retd), chairperson of the Shekatkar committee that has submitted its recommendations to the government to sharpen India’s combat edge and dealt with budgetary issues too, said the gradual decline in military spending over the years would impact India’s combat potential and endurance.

“This fact is not hidden from China and Pakistan,” Shekatkar said. “Ideally, the budget should be 3% of the GDP. But if there are financial constraints, it still needs to be around 2.2% in the upcoming budget considering India’s security challenges and the threat of a two-front war,” he said.

Lieutenant General (retd) AS Lamba, a former army vice chief, said the government had cleared the decks for buying a wide range of military equipment and the budget would have to cater for the backlog in modernisation.


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