Nirmala Sitharaman’s Budget for 2022-23 shows that beyond the hike in the capital budget and industry-friendly provisions that are bound to make the Indian private sector happy, the China factor weighed big on the government’s mind while making defence allocations.
Even through small tweaks, the Budget seems to have finally considered India’s challenges vis-à-vis China, the areas of concern and the work that needs to be done — something I’ve discussed in a previous column. This ought to have been done years ago, or at least since the Doklam standoff in 2017, which gave Indians an inkling of what the Chinese have been up to and are planning.
One of the important outcomes of this Budget is the fact that it seeks to undo some of the startling mistakes made in the past that have forced even Service chiefs to go on record and say that their force was suffering.
Sitharaman announced a defence capital budget of Rs 1.52 lakh crore as against the revised estimates of Rs 1.38 lakh crore for the current fiscal. The cumulative increase in the capital budget since 2019-20 has been Rs 48,975 crore (47.37 per cent). Of the total allocation of 1.52 lakh crore, the capital acquisition budget of the defence services is Rs 1.24 lakh crore for the FY 2022-23.
This is where it gets interesting.
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Biggest beneficiary of defence budget
The Navy has emerged as the biggest beneficiary. The capital budget of the Indian Navy has been enhanced by a whopping 44.53 per cent, with a total allocation of Rs 46,323 crore in FY 2022-23. The increase, the defence ministry says, is aimed at acquiring new platforms, creating operations and strategic infrastructure, bridging critical capability gaps and building a credible maritime force for the future.
It is important to remember that while the Navy got an allocation of Rs 46,323 crore for the next fiscal year, it is actually less than the requirement of Rs 70,920.78 crore it had projected for 2021-22.
Interestingly, the Navy had this year outspent Rs 12,767.99 crore, more than what it was allocated in 2021-22 – Rs 33,253 crore.
Former Navy chief Admiral Karambir Singh had lamented in 2019 that the force’s share of the defence budget had decreased from 18 per cent in 2012-13 to 13 per cent in 2019-20. Replying to a question by ThePrint then, regarding the impact of fund crunch, at a time when China was undergoing massive modernisation of its naval forces, the Navy chief had simply said, “Each force is doing its best according to their respective capabilities.”
I had, since then, argued for a more focused approach towards increasing the allocation for the Navy, which will be at the forefront of wars in the future. The point was that while the Chinese Navy was planning ahead, India’s approach did not match up, above sea or below. So it is a welcome change that the Navy is being accorded priority since it had been forced to scale down its long-term planning because of the financial crunch. There are a number of key naval programmes that are pending, including the ones for submarines – both conventional and nuclear. Not only that, the Navy is desperately looking to get minesweeper vessels to landing platforms, besides, of course, looking at upgrading its depleted fleet of helicopters and fighters.
There is no denying that the Navy will play a key role in any future war, especially given both international and China’s focus is on maritime power. Even major navies in the world, opposing China’s aggression, is a key partner to India — be it the British, the Germans or the Americans.
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Focus on border roads
Another big focus of the defence budget has been the Border Roads Organisation (BRO). The capital budget for the BRO has been increased by 40 per cent to Rs 3,500 crore in FY 2022-23 vis-à-vis Rs 2,500 crore in FY 2021-22. This will expedite the progress of the creation of border infrastructure, including important tunnels (Sela and Nechiphu tunnel) and bridges on major river gaps, including the mega plan to build a 15.6-km twin-tunnel under the Brahmaputra river. This will not only protect the Kaziranga National Park by bypassing it but also benefit India strategically by cutting travel time between Assam and Arunachal Pradesh. The increase in capital budget would ensure that the BRO is able to procure the latest technology and machines to fast track the construction of various key projects, especially along the Line of Actual Control (LAC).
My recent trip to Arunachal Pradesh was an eye-opener because I was able to witness first-hand India ramping up its infrastructure — from speeding up work on new tunnels that provide all-weather connectivity to critical border areas to building new road access, bridges, forward helicopter bases and underground fortified ammunition storage. So the fact that BRO is being beefed up is a welcome change. However, as important as the increased allocation is, one must remember that there’s still a long road ahead.
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Sustained budget growth
Sources in the defence establishment have welcomed the higher allocation but point out that this needs to be sustained over a period of at least the next five years, if not more, to ensure the forces are able to up their game.
As Dr Sameer Patil of the Observer Research Foundation notes, this budgetary hike masks the challenge of the availability of resources. He rightly argues that in the last decade, the defence budget has grown at an annual average rate of 9 per cent, which is barely keeping up with the inflation and the demands of the three services.
Incidentally, according to the government’s own data, the armed forces’ total demand for the capital budget last year was Rs 1,99,553.44 crore. This shows that there is a clear gap in what the forces project under capital expenditure and what is eventually allotted by the finance ministry.
So while the budget presented on 1 February is welcome, it is hoped that the defence allocation continues to see sustained growth.
Views are personal.
(Edited by Srinjoy Dey)