De­fence Spend­ing: Army, Navy & Air Force

The de­fence bud­get of 2,03,672 crore ($37 bil­lion) for 2013-14 is a hike of 5.3 per cent from last year’s bud­get es­ti­mate of 1,93,407.29 crore ($35.8 bil­lion). The Army has been al­lo­cated a to­tal of 17,879.28 crore as cap­i­tal bud­get as com­pared to 15,750.

SP's LandForces - - UNION BUDGET 2013- 14 - LT GEN­ERAL (RETD) V.K. KAPOOR

THE UNION BUD­GET 2013-14 pre­sented in the Par­lia­ment on Fe­bru­ary 28, 2013, by Fi­nance Min­is­ter P. Chi­dambaram, has in­creased the de­fence bud­get to 2,03,672 crore ($37 bil­lion) for 2013-14, mark­ing a hike of 5.3 per cent of last year’s bud­get es­ti­mate (BE) of 1,93,407.29 crore ($35.8 bil­lion), which does not even cater to the in­fla­tion. If the re­vised es­ti­mates are taken into ac­count then the in­crease amounts to 14 per cent over and above last year’s re­vised al­lo­ca­tion. The un­spo­ken and hid­den as­pect is that the cap­i­tal bud­get quite of­ten re­mains un­der­utilised to some ex­tent or is cut by the Fi­nance Min­istry halfway into the year. For in­stance, in De­cem­ber 2012, Fi­nance Min­is­ter P. Chi­dambaram had cut the de­fence cap­i­tal out­lay by 10,000 crore. This year’s bud­get an­nounce­ment was ac­com­pa­nied by the Fi­nance Min­is­ter’s state­ment promis­ing more funds. This is the usual rhetor­i­cal state­ment which ev­ery Fi­nance Min­is­ter makes af­ter declar­ing the al­lo­ca­tions for the de­fence bud­get. The bud­getary al­lo­ca­tion this year marks a re­duc­tion in GDP ra­tio from 1.9 last year to 1.79 per cent of GDP this year.

The fact that it is an unin­spir­ing de­fence bud­get is ob­vi­ous be­cause the de­fence ser­vices are in­volved in a ma­jor mod­erni­sa­tion process with sev­eral ac­qui­si­tions in the pipe­line be­sides upgra­da­tion of in­fra­struc­ture in the north­east along the bor­der with China. The mod­erni­sa­tion of all three ser­vices is way be­hind sched­ule, ad­versely af­fect­ing the op­er­a­tional ca­pa­bil­i­ties of the three ser­vices. The five per cent in­crease in the over­all de­fence bud­get, apart from be­ing mea­gre, when seen in the light of the lack­lus­tre per­for­mance of the De­fence Min­istry in en­sur­ing timely pro­cure­ments of req­ui­site weapons and other sys­tems, has raised the con­cern of all strate­gic and mil­i­tary an­a­lysts about national se­cu­rity. We know that the buck stops at the level of the fight­ing for­ma­tions of the Army, the naval fleets and fighter squadrons of the In­dian Air Force (IAF) and if th­ese are not equipped with mod­ern weaponry and voids con­tinue year af­ter year, then we are look­ing at dis­as­trous con­se­quences in the mak­ing. We have seen the grad­ual degra­da­tion of the op­er­a­tional ca­pa­bil­i­ties of the armed forces over the years. The In­dian Army is the worst af­fected in this re­gard be­cause no new weapon or other sys­tems have been in­tro­duced for the past two decades or so bar­ring a few con­ven­tional mis­sile sys­tems. What is not usu­ally ap­pre­ci­ated is that voids in the Army can­not be made up quickly due to the mag­ni­tude of our re­quire­ments and lack of mil­i­tary ca­pa­bil­ity is also likely to weaken our national re­solve to safe­guard our national in­ter­ests be­cause ei­ther po­lit­i­cally or diplo­mat­i­cally, we will not be able to act firmly if we are mil­i­tar­ily weak.

It can be broadly con­cluded from the fig­ures (see Ta­ble) that the share of the de­fence bud­get in the GDP has de­creased from 1.9 last year to 1.79 this year. More­over, what is quite ev­i­dent is the fact the rev­enue ex­pen­di­ture has been de­creased and this will un­doubt­edly im­pact the trans­porta­tion (fuel) cour­ses abroad, and over­all train­ing of the three ser­vices. It seems that the neg­li­gi­ble growth of the de­fence bud­get has been in­flu­enced pri­mar­ily be­cause of the poor eco­nomic state of the coun­try.

Ser­vice Wise Share in the To­tal Bud­get

The Army with an ap­prox­i­mate bud­get of

99,707.8 crore ac­counts for 48.96 per cent of the lat­est de­fence bud­get, the Air Force with

57,502.9 crore ac­counts for 28.23 per cent, the Navy with 36,343.5 crore ac­counts for 17.84 per cent while the De­fence Re­search and De­vel­op­ment Or­gan­i­sa­tion (DRDO) with

10,610.2 crore ac­counts for 5.21 per cent and ord­nance fac­to­ries with mi­nus 508.7 crore amounts to mi­nus 0.24 per cent. It is ob­vi­ous that the Air Force has in­creased its share in the to­tal de­fence al­lo­ca­tion (from 24.9 per cent to 28.2 per cent). The Navy’s share has de­creased the most (by 1.4 per cent), whereas the Army and DRDO’s shares have de­clined by 1.3 and 0.3 per cent, re­spec­tively. This time, the Air Force is the only ser­vice which has seen an in­crease in both the rev­enue ex­pen­di­ture and cap­i­tal ex­pen­di­ture. For the Army, there is a fall in the cap­i­tal bud­get of 1,294.35 crore when the bud­get es­ti­mate fig­ure of pre­vi­ous year is com­pared to this year’s al­lo­ca­tion.

Im­pact on Mod­erni­sa­tion

The cap­i­tal bud­get shows an in­crease of nine per cent as com­pared to 15 per cent last year. Cap­i­tal bud­get is mainly meant for new pro­cure­ments for mod­erni­sa­tion of the armed forces. Cur­rently, all three ser­vices are in the process of un­der­tak­ing an ex­ten­sive mod­erni­sa­tion drive and there­fore the mea­gre amount of in­crease in the cap­i­tal bud­get im­plies an­other dry year for most pro­cure­ment.


The Army has been al­lo­cated a to­tal of 17,879.28 crore as cap­i­tal bud­get com­pared to 15,750.30 crore in the rev­enue es­ti­mates (RE) of last year, an in­crease of about 2,129 crore. Un­der the heads: air­craft and aero en­gines, heavy- and medium-ve­hi­cles, and other equip­ment which con­sti­tute the heads un­der which most cap­i­tal pro­cure­ment is done, the Army has been al­lo­cated only 13,311 crore (ap­prox­i­mately $2.7 bil­lion) and con­sid­er­ing the high in­fla­tion­ary trends and un­favourable ex­change rate regime, and the fact that more than 60 per cent would go for pay­ing com­mit­ted li­a­bil­i­ties, it would leave 5,324.4 crore for new pro­cure­ments which is mea­gre con­sid­er­ing that even the Eleventh Five Year Plan (2008 to 2012) pro­cure­ments have not fruc­ti­fied. Added to this is the in­cred­i­bly slow and com­pli­cated pro­cure­ment pro­ce­dure in which any agency of the govern­ment (there are more than 20 such agen­cies apart from Ser­vice Head­quar­ters) in­volved in the pro­cure­ment process can stymie the en­tire process through their ob­ser­va­tions and not­ing on the file.

The Army needs to in­duct var­i­ous types of new equip­ment. The list in­cludes new Ar­jun Mark II tanks and upgra­da­tion of its T-72 tank fleet and the in­fantry com­bat ve­hi­cle (ICV) BMP-2/2K fleet, pro­cure­ment of about 1,500 How­itzer of 155mm 52-cal­i­bre, pro­cure­ment of 145 ul­tra-light weight 155mm how­itzers for the moun­tains from BAE Sys­tems, weapon up­grades for air de­fence units of L-70 guns, ZU-23-2 twin-guns, and ZSU-23-4 Schilka, a lethal and so­phis­ti­cated as­sault ri­fle for its in­fantry, and 197 light ob­ser­va­tion helicopters for the Army Avi­a­tion to re­place the ex­ist­ing fleet of Chee­tas and Chetaks and to in­duct at­tack and armed helicopters for close sup­port of Army for­ma­tions in the bat­tle­field.

Ad­di­tional re­quire­ments have to be catered for five new in­fantry/moun­tain di­vi­sions, out of which two have al­ready been raised for the eastern theatre, for which var­i­ous types of equip­ment in­clud­ing in­fantry weapons, light ar­mour, ar­tillery and small arms are re­quired. Three more in­fantry di­vi­sions are re­quired as a part of the moun­tain strike corps whose pro­posal has been ac­cepted by the govern­ment. Over the next five to seven years or so, the Army will have to in­crease its man­power by about 1,20,000 soldiers.

The equip­ment listed above com­prises the ma­jor items re­quired and is by no means ex­haus­tive while the cap­i­tal bud­get this year is ex­tremely mod­est. If the unim­ple­mented schemes of Eleventh De­fence Plan and the re­quire­ments of the Twelfth Five Year Plan (1213 to 1217) are added, the sit­u­a­tion is ex­tremely crit­i­cal.

Air Force

The Air Force is look­ing to pro­cure the 126 medium multi-role com­bat air­craft (MMRCA) Rafale fighter air­craft from France, apart from 22 Apache 64-D at­tack helicopters from the US. In the pipe­line there are also15 Boe­ing CH-47F Chi­nook heavy-lift helicopters for $1.4 bil­lion, and six Air­bus A330 multi-role tanker trans­port for about $1 bil­lion. The to­tal cap­i­tal bud­get al­lo­ca­tion to the Air Force un­der the heads air­craft and aero en­gines, heavy and medium ve­hi­cles, and other equip­ment amounts to 37,048 crore ($6.74 bil­lion) and if about 80 per cent is used to pay for com­mit­ted li­a­bil­i­ties, it would leave about 7,409.6 crore for new pur­chases whose list is rather long.


The In­dian Navy has been al­lot­ted 8,965.37 crore (about $1.63 bil­lion) un­der var­i­ous heads as com­pared to last year’s fig­ure 4,968.13 crore (about $0.9 bil­lion); al­most a twofold jump. In ad­di­tion, the Naval fleet has been al­lot­ted 11,772.26 crore (about $2.14 bil­lion), as com­pared to last year’s fig­ure of 11,012.90 crore (about $2 bil­lion) which is a mar­ginal in­crease. This amount is used for ac­quir­ing new ships and for pay­ing for com­mit­ted li­a­bil­i­ties un­der cap­i­tal ac­qui­si­tions. The In­dian Navy cur­rently awaits the Min­istry of De­fence’s (MoD) de­ci­sion on procur­ing 16 multi-role twin-engine helicopters (10-tonne), for which the Europe NH In­dus­tries NH-90 model is pit­ted against Siko­rsky’s S-70B Sea Hawk. The ad­vanced anti-ship and anti-sub­ma­rine war­fare­ca­pable plat­forms, des­per­ately needed by the In­dian Navy to re­place the age­ing fleet

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