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.
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