New Delhi: The armed forces are hoping for a miracle this Union Budget from Finance Minister Nirmala Sitharaman — a substantial rise in the defence allocation, which will enable them to bring on track the mega procurement plans that have either slowed or stalled.
Citing the ongoing border standoff with China, sources in the forces said there is a stark need for defence modernisation.
A number of mega deals are pending or have slowed due to budgetary constraints, including those for new transport and fighter aircraft, and helicopters for the Indian Air Force (IAF); artillery guns, assault rifles, snipers and specialised vehicles for the Army; and fighter aircraft, submarines, new warships and helicopters for the Navy.
Experts, however, say a large budgetary rise is not on the cards. Given that the pandemic has hit India’s economy and the government’s priority will be investment in infrastructure and health, a raise of Rs 10,000-15,000 crore in capital budget would be welcome, they say.
Government sources too indicated to ThePrint that the Ministry of Defence’s push for a rollover budget or a non-lapsable fund for itself is unlikely to be met on 1 February when FM Sitharaman will present the Union Budget 2021-22.
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Last budget and modernisation bid
In 2020-21, the Narendra Modi government increased India’s defence budget by a mere 1.82 per cent to Rs 3.37 lakh crore, excluding expenditure on pension. ThePrint had then reported that the allocation isn’t enough for a military that has been forced to cut back on its procurement and modernisation plans due to lack of funds.
The capital budget for the military, which is used for new acquisition and modernisation, saw a meagre 3 per cent rise, or Rs 3,400 crore, over the revised 2019-20 estimates.
The IAF, which is in the middle of buying nearly 200 new fighter aircraft, saw its capital budget lowered from revised estimates of Rs 44,869.14 crore to Rs 43,281.91 crore.
According to a 2019 report, the Modi government has firmed up a mega plan to spend $130 billion to bolster combat capability of the armed forces in the next five to seven years. However, all three services have since spoken on record about the budgetary constraints, and impediments to modernisation.
In a scathing January 2020 report, the Parliamentary Standing Committee on Defence had also criticised the Modi government for inadequate budgetary allocation for the Army.
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What the forces say
According to sources in the armed services, the standoff with China in eastern Ladakh has brought out the desperate need for modernisation out in the open.
Since the standoff began in April-May, all three services have gone in for emergency procurement.
A source in the forces said, “The budget has to come up with an increased hike for the defence sector. China is going to be a constant challenge now. There is no other way than having a strong military to deal with China. A strong military means having the deterrence power to deal with a country which is not just bigger militarily but also economically.”
A second source said it’s not just the Army that needs modernisation to tackle China, but also the Navy and the Air Force.
“Chinese military is expanding, be it the Army, Navy or the Air Force. From being a manpower intensive military, they are in advanced stages of being a capital intensive force. To even offer the slightest credible deterrence power, the Indian armed forces need to modernise and for this money is important,” the second source said.
Earlier this month, former defence secretary G. Mohan Kumar noted the need to equip India’s forces, especially the Army and the Air Force on the eastern front through fast-track procurement on priority, which will necessitate heavy revenue and capital expenditure.
“This could effectively hobble long-term capability building and ‘Make in India’, unless the government increases defence-service allocations disregarding its resource crunch. Strategically, a strong naval presence in the Indian Ocean is vital for keeping China at bay,” he wrote.
Major General Yash Mor (Retd), former General Officer Commanding of the Leh Sub Area, said India spends one of the lowest per capita on defence compared to the largest six. “We need to spend more. Budget has to factor in the economic situation and also the threat perception,” he said.
Experts don’t see chances of big jump
Laxman Behera, associate professor at Jawaharlal Nehru University’s Special Centre for National Security Studies, said there is no doubt India’s defence is in urgent need for substantial increase in allocation, but wasn’t hopeful of a big jump.
“Any increase would be welcome given the state of the economy. But I don’t think there will be a huge increase,” he said.
“The fact that the defence budget was kept away from the Covid curbs in 2020 is encouraging. Since DA was not given, no major raise in revenue budget for defence should be expected. However, a raise of Rs 10,000 to Rs 15,000 crore in capital allotment would be welcome,” Behera added.
Tara Kartha, former director, National Security Council Secretariat, said there is no way a drastic jump is possible. India will have to decide what kind of war it wants to fight and rationalise the mass spending on purchase of the next generation of the same equipment, she argued.
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The Indian Armed forces with its rising pensions bills are in dire need of pensions reforms. Pension reform by Britain in 2015 and the US in 2018 could help plan out a pension scheme that is sustainable. But a copy paste may not work for the armed forces as we have to keep in mind our resources both manpower and money.
The Pensions cut recommend by the CDS were quite absurd from any point of view but if it was backed by a countributory pension scheme and a adopted for those joining after a certain date (say 1 jan 2023) it would have been better welcomed by defence personnels.
A blended pension scheme in which the government contributes (years of service +10)% of highest draw salary in that year and defence personnel contribute 10% of their salary, a Blended Armed force National pension Scheme will be welcomed as compared to outright pension cuts.
A personnel with 20 years of service will get pensions equivalent to 40% of his/her salary; those with 30 years service will get 50% of his/her salary. It such a pension sceme was implemented it would save the armed forces 8000-10000 crore annually in the first few years but 20-25 years later it would save 50,000 crore annually which could be used instead for modernization.
Quick fixes cannot solve the Armed Forces modernization problems, the new pensions schemes by itself would not be enough but need to be backed with a defence budget equivalent to atleast 2.5-3% of GDP. Modern problems require modern solution.
What kind of war will be fought? A lopsided one. China’s military is advanced while India’s is antiquated. In a war, China will fire barrages of missiles destroying every valuable military target in Ladakh.
When defense experts quote sources, it often appears to be a source which only see the requirements of the forces with little regard to the needs of the money elsewhere. Do such sources based opinions help the moral?
Fighting an enemy which is supposed to be stronger both militarily and economically requires extremely high moral and motivation. So knowledgeable people while commenting need to keep that in mind, the high moral and motivation is our strength and the lack of it was the Himalayan Blunder of 1962