DEFENCE BUDGET
JULY 2012
DSI
On paper, Indiaʼs defence spending may have increased but in reality the hike has been neutralised by chronic delays in acquisition and growing inflation
Indian commandos from the Jammu and Kashmir Armed Police march at the Sheeri Training Centre, Srinagar
GURMEET KANWAL
KEY POINTS
In keeping with inflation, the increase in the Defence Budget, fiscal 2012- 2013, is barely adequate. The armed forces can be effectively modernised if the allocation goes up to 2.5 to 3.0 percent of the GDP. India’s per capita defence expenditure is well below international norms.
AFP
I
BACKWARD MARCH 34
Defence Budget 2nd time.indd 1-2
n an otherwise lacklustre annual Budget devoid of any enthusiasm for reform, Finance Minister Pranab Mukherjee has done well this year by hiking the country’s Defence Budget by 17.6 percent in rupee terms. This hike is in keeping with the growing threats, challenges and vulnerabilities facing the country, India’s increasing responsibilities as a regional power and the need to modernise India’s armed forces in order to meet emerging threats and challenges. A detailed letter written by the Chief of Army Staff to the Prime Minister Manmohan Singh this March, revealed the real state of India’s defence preparedness and the fact that huge funds will need to be invested to make up operationally critical deficiencies. In real terms, the absolute increase from `1,64,415 crore in 2011-12 to `1,93,007 crore for 2012-13 is barely adequate to allow for inflation, currently ruling at about 7.5 percent, and the consequent increase in pay and allowances. The rupee’s recent slide against the US dollar to almost `55 to a dollar has further eroded its purchasing power. Annual inflation in the international price of assorted weapons, ammunition and defence equipment is generally between 12-
15 percent. Therefore, each year’s delay in the procurement of operationally critical items substantially increases the burden on the exchequer. On its part, China’s People’s Liberation Army and its sister services – the Navy, the Air Force, the Second Artillery and the nuclear strike force – have been modernising at a rapid pace for over a decade, backed by a double-digit annual hike in the country’s Defence Budget. At USD 106 billion, China’s official Defence Budget for the current year is 11.2 percent more than the previous year and it is almost three times India’s planned defence expenditure. As China invariably conceals many items of expenditure on security, its actual expenditure is likely to be well over USD 150 billion. China is also investing heavily in modernising its surface-to-surface missile firepower, fighter aircraft and air-to-ground strike capability. It is acquiring strategic airlift capability, modern aircraft carriers, new submarines, improving command and control and surveillance systems and is enhancing its capacity to launch amphibious operations. It is also upgrading the military infrastructure in Tibet to sustain larger deployments over longer durations. Despite the long list of obsolescent weapons and equipment in service with the Indian armed forces, the present military gap with China is quantitative rather than qualitative. However, as India’s military modernisation has been stagnating for several years, this gap will soon become a qualitative one as well. By about 2020-25, China will complete its military modernisation and will then be in a position to dictate terms on the resolution of the territorial dispute if India continues to neglect defence preparedness.
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