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The Indian defence expenditure for
the financial year 2012-13 has been budgeted at a fairly high
figure of Rs.193,407 crore (budgeted expenditure, or BE) which
converts to $38.5 billion and is not unreasonable -- but is well
below China's corresponding figure of $100 billion. However, to
get a true sense of how this translates into tangible Indian
military capacity, this allocation is to be seen in relation to
the revised expenditure (RE) for the last fiscal that was
announced as Rs.170,937 crore ($34 billion). The increase thus is
of the order of 13 percent from the actual amount spent in
2011-12.
However, this is only one perspective, for the BE for 2011-12 was
Rs.164,415 crore ($32.7 billion) and this was revised by over
Rs.6,000 crore to reach almost Rs.171,000 crore. The Indian
defence expenditure is broadly divided into two heads - the
revenue and capital components - with the latter accounting for
acquisition of new equipment and inventory items, as also
modernisation of existing platforms. Ideally, a 50:50 ratio, or
even a marginally greater amount for the capital head, would be
the most desirable norm - but in the Indian case, since the
military machine is largely manpower intensive, the opposite
pattern prevails - meaning that the revenue component is higher.
Thus for the current fiscal - 2012-13 -- the total revenue
expenditure is budgeted to be Rs.113,829 crore, while the total
capital outlay is pegged at Rs.79,578 crore. Paradoxically, in the
last fiscal, 2011-12, the capital expenditure was planned for a
total of Rs.69,199 crore - but the actual expenditure as announced
in the budget documents presented on March 16 was of the order of
Rs.66,143 crore. In other words, the defence ministry surrendered
Rs.3,056 crore as unspent from its capital head - and this is
reflective of the inability to arrive at swift and objective
decisions that will contribute to laying a strong foundation for
capacity-building of the Indian military profile.
But then the question that arises is where did the increased
expenditure occur over the last year? The increase from BE to RE
for the last fiscal, 2011-12, is of the order of Rs.6,522 crore
and this was expended in the revenue component, which along with
the unspent capital amount of Rs.3,056 crore offers an insight
into the trends that characterise India's defence expenditure.
The lack of a clear strategic focus is evident when the spending
pattern of the last decade is examined in some detail. On the one
hand, the revenue expenditure is closer to 60 percent against the
capital head, even when allocated amounts remain unspent - except
in the last fiscal - which was an exception to the general trend.
The lack of a strategic underpinning is evident when a very
anomalous situation obtains, in that capital funds are returned as
unspent when the Indian military across the board is in dire need
of modernisation of critical equipment and platforms.
For instance, the Indian Army has been seeking to replace the old
Bofors gun - the mainstay of the artillery for well over a decade
-- but to little avail. Given the kickback allegations and related
political scandal going back to the Rajiv Gandhi years
(mid-1980s), the Indian higher decision-making system remains
inert or is in eternal slow motion. Thus 25 years after the Bofors
scandal broke and a decade after the Kargil War, the Indian Army
is yet to get a replacement for its artillery gun!
Decision-making remains paralysed since the major political
parties have chosen to attack one another over corruption and
transgression issues - from Bofors to coffin scams - and as a
result, India's military capacity has glaring gaps. Defence
expenditure and budget allocation is held accountable to strict
compliance with audit regulations and fear of
politically-motivated investigations and hence no senior official
in the Ministry of Defence wants to take long-term decisions that
will benefit national military capability-building.
India's total defence allocation can also be viewed in the
regional context -- while the current allocation for this year is
closer to $40 billion, the Chinese defence budget announced
recently is closer to $100 billion. While India does not seek
equivalence with China, the pattern of defence allocation and the
priorities set by the political leadership is a contrast.
Since the end of the Cold War in 1991, Beijing has set itself the
task of acquiring credible indigenous design and production
capabilities in the defence and military domain - and also
utilised its domestic industrial base to advantage. India, on the
other hand, has the dubious distinction of becoming the world's
leading arms importer over the last decade. Much of the funding
from the capital head goes to foreign suppliers and over the last
20 years, Indian funding has proved crucial to the very survival
of certain defence industries -- first in Russia and now in
France.
It is regrettable that the defence expenditure is rarely discussed
in parliament despite being a reasonably large amount - and where
debates do occur, they are zero sums games between bitter
political opponents.
It merits recall that over the last decade, two high-powered
committees have rendered their reports - the Kelkar and the Rama
Rao panels - about the challenges to India's acquisition
procedures and the need for a rigorous defence public sector/DRDO
review. However, both reports remain shrouded in secrecy - and
have not come up for detailed discussion in parliament or in the
national trade and commerce chambers.
If examined in an objective manner, where everyone is a
stakeholder in contributing to national security, some
embarrassing truths will be revealed. More than 60 years after
becoming a republic and 50 years after the debacle with China, the
opaque Indian defence production establishment does not produce
high-quality clothing and personal inventory items like boots -
let alone a suitable rifle for a one million army, or tanks and
aircraft. The question that Defence Minister A.K. Antony may like
to ask is why the stoic Indian jawan still buys his uniform from
the market and shuns what the government provides?
Fiscal allocations by themselves tell a partial story. Creating
appropriate military capacity requires a certain degree of
political commitment and institutional integrity that appear
elusive in the Indian context.
Commodore (Retd) C.
Uday Bhaskar is one of India's leading strategic analysts. He can
be contacted at cudayb@gmail.com
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