De­fence Bud­get 2013-14


A his­tory of messed up de­fence deals since the Jeep scam of 1950s, the more re­cent Bo­fors field guns scan­dal, HDW sub­marines, Scor­pene sub­marines, among oth­ers, and the de­lays there on, has re­peat­edly af­fected de­fence pre­pared­ness of the coun­try

De­fence Min­is­ter A.K. Antony’s hint of a pos­si­ble de­fence bud­get cut in the next fis­cal, dur­ing Aero In­dia 2013, had sent shock waves in the de­fence com­mu­nity. His state­ment coming im­me­di­ately af­ter the ` 10,000 crore cut in the 2012-13 de­fence bud­get, had brought in a mood of pes­simism. High in­fla­tion, fis­cal deficit, the forth­com­ing Lok Sabha elec­tions in 2014, po­ten­tial growth rate be­low eight per cent, had made all ap­pre­hen­sive about what will come in next. Nev­er­the­less, the De­fence Min­is­ter con­tin­ued to lobby for more funds on the side­lines.

On Fe­bru­ary 28, when the Union Bud­get 201314 was pre­sented in the Par­lia­ment, ev­ery­one was re­lieved to see Fi­nance Min­is­ter P. Chi­dambaram giv­ing a small raise in his eighth bud­get speech. This year’s de­fence bud­get of ` 2,03,000 crore is up 5.18 per cent from last year’s al­lo­ca­tion of ` 1,93,000 crore. It is just 1.79 per cent of the pro­jected GDP, down from 1.9 per cent last year and 14 per cent hike vis-à-vis last year’s re­vised es­ti­mate (RE) of ` 1,78,503 crore. Of this, ` 86,741 crore, up from ` 69,579 crore, a 24 per cent in­crease over re­vised es­ti­mates of last year; would be for cap­i­tal ex­pen­di­ture. Hav­ing for the first time breached

` 2 tril­lion, ev­ery­one is now wait­ing to an­a­lyse the fine print.

In­dia has se­ri­ous boundary dis­putes with its two nu­clear pow­ered neigh­bours. The re­gion is also the epi­cen­ter of ter­ror­ism. There is an in­creas­ing gap be­tween the mil­i­tary ca­pa­bil­ity of our north­ern neigh­bour and us. “China con­tin­ues to grow faster than In­dia,” the Min­is­ter said in his speech. By and large, the bud­get in­crease should be at least 15-20 per cent. Last year’s fi­nal al­lo­ca­tion was less than two per cent of GDP. One day we have to go from 2.5 per cent of GDP to about 3.5 per cent of GDP in mil­i­tary spend­ing. The shop­ping list is huge. There­fore, it is still not a time to clap.

De­fence Pre­pared­ness

In­dia’s de­fence pre­pared­ness had been in the lime­light for some time now. Ear­lier the former Army Chief Gen­eral V.K. Singh had writ­ten to the Prime Min­is­ter about the lack of In­dian Army’s op­er­a­tional pre­pared­ness. The de­fence bud­get cuts in the end of 2012 had post­poned many an im­por­tant pur­chases. The restart of the en­tire process for pur­chase of 197 light util­ity he­li­copters (LUH) worth about ` 10,800 crore, which had al­ready been in the fi­nal pro­cure­ment stage, has put the heli­copter fleet of the Army and Air Force back­wards by a few years. The re­cent scru­tiny and al­le­ga­tions of bribery in the pur­chase of he­li­copters from a unit of Ital­ian de­fence gi­ant, Fin­mec­ca­nica SpA, and the threat of can­cel­la­tion of the deal has af­fected the mo­rale even fur­ther. A his­tory of messed up de­fence deals since the Jeep scam of 1950s, the more re­cent Bo­fors field guns scan­dal, HDW sub­marines, Scor­pene sub­marines, among oth­ers, and the de­lays there on, has re­peat­edly af­fected de­fence pre­pared­ness of the coun­try. The In­dian Air Force (IAF), which gets the lion’s share of the bud­get for new weapons, fol­lowed by the In­dian Army and the In­dian Navy, is most ea­gerly await­ing the sign­ing of the 126 medium multi-role com­bat air­craft (MMRCA) pro­gramme to re­store the dwin­dling num­bers. Also awaited are the 22 Apache at­tack he­li­copters and 15 Chi­nook heavy-lift he­li­copters. The Army wants ` 32,400 crore to raise bat­tal­ions in the Indo-China bor­der. Navy has a shop­ping list to se­cure the sea lanes. The car­ry­over li­a­bil­i­ties are eat­ing into the mod­erni­sa­tion funds. As ter­ror res­onates in the re­gion and Mum­bai and Hy­der­abad ter­ror strikes re­peat at reg­u­lar fre­quency; it is time for in­tro­spec­tion. The government’s job is not easy. There are com­pet­ing de­mands from the so­cial and devel­op­ment sec­tors. “Faced with a huge fis­cal deficit, I have no choice but to ra­tio­nalise ex­pen­di­ture. We took a dose of the bit­ter medicine. It seems to be work­ing. In­dia must make tough spend­ing choices,” the Min­is­ter said in his speech and added, “The Min­is­ter of De­fence has been most un­der­stand­ing and I as­sure the house that con­straints will not come in the way of pro­vid­ing any ad­di­tional re­quire­ment for the se­cu­rity of the na­tion.

“Do­ing busi­ness in In­dia must be seen as easy, friendly and mu­tu­ally ben­e­fi­cial,” said the Min­is­ter. It is pre­sumed that he meant it also for the de­fence sec­tor. While we weed out cor­rup­tion from the en­tire so­ci­ety, de­fence of the na­tion should not be­come the only ca­su­alty.

Fi­nance Min­is­ter P. Chi­dambaram ar­rives at Par­lia­ment to present the

Union Bud­get 2013-14

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