De­fence al­lo­ca­tion on de­cline

Vayu Aerospace and Defence - - Commentary - Air Mar­shal RS Bedi (retd) in The Tri­bune

So far as the al­lo­ca­tion of funds for the de­fence forces is con­cerned, this year has been no dif­fer­ent from the pre­vi­ous ones. Not­with­stand­ing the ur­gency of match­ing the coun­try’s mil­i­tary pro­file with some of our bel­liger­ent neigh­bours, the govern­ment hasn’t quite come up to the ex­pec­ta­tions. What­ever be the ar­gu­ments in favour of the pro­jec­tions made by the Ser­vices/MOD, the gen­eral ten­dency on part of the govern­ment is to al­lo­cate only in the re­gion of 55 to 65 per cent of the pro­jec­tions. The al­lo­ca­tion of Rs 2,95,511 crore for the en­su­ing fis­cal over the cur­rent year’s Rs 2,74,114 crore is tan­ta­mount to a mere in­crease of Rs 21,397 crore, a mod­er­ate hike of just 7.81 per cent.

This in­cludes the cap­i­tal out­lay of Rs 99,563 crore meant for pro­cure­ment, moderni­sa­tion etc. With a large num­ber of plat­forms for the Air Force and the Navy and mul­ti­plic­ity of other weapon sys­tems for all the three ser­vices pend­ing pro­cure­ment, an in­crease in cap­i­tal out­lay of the or­der of Rs 13,075 crore seems equally mod­er­ate.

Cap­i­tal out­lay is rarely fully utilised ev­ery time is one ar­gu­ment ad­vanced for re­stricted al­lo­ca­tions at the BE (Bud­get es­ti­mate) stage. It is not fully utilised for rea­sons of com­plex pro­cure­ment pro­ce­dures, long-drawn ne­go­ti­a­tions, po­lit­i­cal con­straints and de­vi­ous other such fac­tors. The fact that it also in­cludes the time­con­sum­ing process of land ac­qui­si­tion and con­struc­tion works also adds to the de­lay fac­tor.

Moderni­sa­tion is an in­escapable ne­ces­sity to keep pace with the ad­ver­sary’s ris­ing po­ten­tial. De­spite all ef­forts, it con­tin­ues to lag. Old and vin­tage plat­forms and weapon sys­tems have to be re­placed reg­u­larly be­cause of their ris­ing main­te­nance cost. All this takes time. In the ac­qui­si­tion of weapon sys­tems, par­tic­u­larly in­volv­ing for­eign ven­dors, the gap be­tween ac­cep­tance of ne­ces­sity and con­tract sign­ing could well take many years. The pur­chase of Rafale air­craft ini­ti­ated in the year 2010 is yet to fruc­tify. Fac­tors like these lead to sur­ren­der­ing of cap­i­tal funds on an al­most reg­u­lar ba­sis. For once, the Min­istry of De­fence was able to utilise the en­tire cap­i­tal out­lay for the year 2017-18 whereas it had “only” sur­ren­dered an amount of Rs 6,886 crore dur­ing the pre­vi­ous year.

This may, per­haps, be one of the rea­sons for the govern­ment to hold back al­lo­ca­tions at the BE stage. That is how ev­ery Fi­nance Min­is­ter ends up say­ing that the govern­ment re­mains com­mit­ted to en­hanc­ing the mil­i­tary’s op­er­a­tional ca­pa­bil­i­ties by en­sur­ing req­ui­site bud­getary sup­port when needed.

In con­trast, the rev­enue ex­pen­di­ture is in­vari­ably fully utilised. It is crit­i­cal to main­te­nance ac­tiv­ity and de­fence-pre­pared­ness. But this too con­tin­ues to fall short, av­er­ag­ing over a decade to about 17 per cent or so. The de­fence al­lo­ca­tion of 1.57 per cent of the GDP for the new fis­cal is per­haps the low­est in re­cent years. The down­ward trend seems rather in­con­sis­tent with the preva­lent se­cu­rity en­vi­ron­ment in the re­gion. The sev­enth largest econ­omy in the world grow­ing around seven per cent has not been able to keep pace with the neigh­bours who con­tinue to spend much larger amounts year after year.

The fact is that the armed forces have to con­tin­u­ously up­grade their where­withal to match that of the ad­ver­sary. Moderni­sa­tion is noth­ing but ac­quir­ing the best to match what the ad­ver­sary has and what is re­quired to achieve the politico-mil­i­tary ob­jec­tive. It’s a plain and sim­ple ques­tion of com­pet­i­tive re-ar­ma­ment. In­dia has no op­tion but to de­velop ca­pa­bil­i­ties that would dis­suade ad­ver­saries from any un­due ven­ture.

How­ever, when de­fence al­lo­ca­tion is viewed in terms of per­cent­age of CGE (Cen­tral Govern­ment Ex­pen­di­ture) and not of GDP, it presents an en­tirely dif­fer­ent pic­ture. This year’s de­fence al­lo­ca­tion of 12.10 per cent of CGE is al­most the same as last year. In fact, it had re­mained by and large con­stant be­tween 12 and 13 per cent dur­ing the en­tire decade. But when viewed as a per­cent­age of GDP, it shows a de­clin­ing trend year after year. How­ever, con­ven­tion­ally, the de­fence ex­pen­di­ture is al­ways re­flected as a per­cent­age of GDP the world over.

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