Xi wanted to teach India about imbalance of power. We should take a budgetary lesson from it

While we talk much about our military, we don’t put our national wallet where our mouth is. Nobody is saying we should double our defence spending, but current declining trend must be reversed.

Illustration by Soham Sen/ThePrint

The India-China LAC disengagement is both a major step forward in the assertion of our national resolve, and a reminder that military capability gaps between India and China have already reached unsustainable levels. These are widening.

The positive outcomes first. It is hugely creditable how Indian troops stood on these heights looking the Chinese in the eye, never flinching. This was also a demonstration that the last decade’s flurry of infrastructure-building along Himalayan borders has begun to pay off.

There is no other way India would have been able to move additional forces—including an entire strike corps with its armour and mechanised forces, ammunition and support arms—to these heights in express time. Continuous resupply and maintenance of 60,000-plus troops at altitudes ranging from 14,000 to 17,000 feet underlines the brilliant work done by our government, Army, engineers and contractors.

Celebrations done, we must prepare for the inevitability of another standoff with the Chinese in the next three to four years. That’s been the rinse-repeat pattern since 2013, directly coinciding with the rise of Xi Jinping.

He took power with the resolve to demolish the post-1993 status quo established by a series of agreements on maintaining peace and tranquillity along the LAC. One reason he felt he could afford to do so was the military capability differential that had grown between India and China.

There was Depsang first (2013), Chumar (2014), Burtse (2015), Demchok (2016), and then Doklam in 2017. The 2020 move in eastern Ladakh, at least in my analysis, seemed an offensive pushback to the change in Jammu and Kashmir’s constitutional status, the declaration of Ladakh as a Union territory and a renewed assertion on retaking Aksai Chin. Xi read it with India’s rushed infra building and increasing force deployments in the area. He decided to pile in the forces to demonstrate to India the gap in capabilities. Or the costs of merely ensuring no Indian territory is lost. This, India has managed to do, albeit at great cost financially.

There’s also a cost in shifting the balance of its forces, especially strike forces, between the two fronts. The activation of the western Himalayan frontier did result in the diversion of a strike corps equipped, trained and tasked to attack deep into the Pakistani plains, to these heights.

Another division-sized force was moved out of its counterinsurgency role in the Jammu-Poonch-Rajouri area and Pakistani infiltrators have taken advantage of it. To counter this, once again, a division allocated to strike formations on the Pakistan frontier has been moved in.

Another division has been moved to the central sector, to be the bulwark of the new China-focused corps (Uttarakhand frontier) being raised at Bareilly. This is a massive change in the Indian Army’s Order of Battle across the two fronts. The Pakistanis are watching.

The Chinese, on the other hand, do not have any ‘active’ fronts. They have the luxury of treating most of their forces as a strategic reserve since in their neighbourhood, they are the only ones with the moves.

If in the past decade we have had three-and-a-half major standoffs with China, India would be delusional not to brace for another in the next three years or so. At least that’s the algorithm. Where it could be, will always remain the question. Because China can conjure up ‘differences’ anywhere along a 3,500-km-plus frontier. This will keep India off-balance, distracted from its deterrence against Pakistan. It already feels emboldened to resume ‘activity’ in Kashmir.

The Chinese have also done India a favour by underlining that its latter-day pacifist approach to military spending and modernisation was unsustainable. When the first Modi government came to power, the promise was to greatly up defence spending, which it charged the UPA with neglecting.

Data tells us that in the initial years of NDA-1, this promise was kept. Defence spending rose as a percentage of the budget, and even as a percentage of GDP. In 2013, defence took up about 16 percent of the national budget. Two years into the Modi era, by 2016-17, it reached 18 per cent. That was a significant rise in an expanding budget.

It started declining thereafter. Today, it’s just 13 per cent. That was never the expectation from the Modi government. And this despite the introduction of OROP, and thereby increased pension costs. Any impact of the Agnipath scheme on pensions will take 15 years coming. For most of this data, I rely on this brilliant paper by PRS Legislative Research.

It seems that by his third year, Narendra Modi came to the conclusion that a real war was now highly unlikely, if not impossible. More resources, therefore did not have to be pushed into defence and could be utilised on welfare instead. It worked well electorally, and national security could still  be counted upon to bring the emotional upsurge (Pulwama-Balakot, 2019) when needed. All it took was the tiniest skirmish. The same trend of defence budgets declining as a ratio of the GDP and national budget continued year after year to reach today’s levels—the lowest since maybe 1960, as this data from macrotrends.net indicates. In the current year, our defence budget is 1.9 percent of GDP.

The rude Xi Jinping nudge will now shake us up from this complacent mindset. We talk much about our military but do not put our national wallet where our mouth is. Nobody is saying we should double our defence spending or take it to the peak Rajiv Gandhi reached in 1987 (4.23 percent of GDP), our highest ever. But the ongoing decline must be reversed.

What if India targeted an increase of a mere 0.2 percent of GDP in the defence budget next year? A calculation done with the help of India’s foremost defence budget analyst—Laxman Behera, associate professor, Special Centre for National Security Studies at JNU—shows that presuming a 7 percent GDP growth, with the defence budget remaining at the current 1.9 percent of GDP, the defence forces will have about Rs 43,000 crore more next year. Much of it will be eaten up by increases in salaries (about three pending annual increments and at least two instalments of dearness allowance). That will leave very little more for modernisation and acquisitions.

A mere 0.2 percent rise in the share of GDP for defence (to 2.1 percent from 1.9), will put about Rs 1 lakh 22 thousand crore additionally at their disposal. This India can afford. Since defence planning cannot be episodic, this should be accompanied by a clear statement of intent to take spending up by just 0.1 percent of GDP each successive year until it reaches 2.5.

This additional money will go into acquisitions and modernisation, from fighter planes to submarines, missiles and long-range artillery and of course, hugely needed improvements in cyber and drone warfare capabilities.

This will mark a major reversal of the trend since 2017. The Modi government may still be right in thinking that a major, all-out war is not likely to happen. But if your actions—as in diminishing defence spending—expose your thinking to your adversaries, they will also take it as complacence and move accordingly. The best guarantee for peace is to look prepared for war, build obvious superiorities over rivals in some key, visible areas. Anything less will encourage both China, and soon enough, Pakistan into unleashing low-level but debilitating adventurism. India cannot afford to leave itself vulnerable. Reversing the decline and raising defence spending slowly to 2.5 per cent of GDP in the next four years is what India needs, and can surely afford.

(Next week: How to raise some additional resources and where to build superiorities)