By C Uday Bhaskar
India’s overall financial outlay in the national budget offers some instructive insights about the constraints and the opportunities in which national security, in its most comprehensive definition, is pursued at the policy level.
A brief comparison with the allocation announced on February 1 by Finance Minister Arun Jaitley illuminates certain trends, particularly the steady increase in the revenue/manpower costs and the resultant shrinkage of funds available for modernising the inventory of the Indian military.
The budgeted estimate for 2018-19 for defence is pegged at Rs 2,95,511 crore ($46 billion) (for the armed forces, the DRDO and the defence production units) and a separate allocation of Rs 1,08,853 crore has been made for defence pensions.
The disaggregation points to an increase in the revenue component (standing costs for a one million-plus military) which for the current fiscal is Rs 1,95,947 crore, while the capital expenditure (for acquisition/modernisation of inventory) has a provision of Rs 99,564 crore. The fact that the overall pension bill in 2018-19 (which includes retired uniformed and civilian personnel) is now greater than the capital outlay is illustrative of the constraints of competing sector-wise allocation of a shrinking defence pie in the larger national context.
To its credit, the Modi government has maintained the sanctity of the pension commitment for all government employees so entitled; and while certain inequities are yet to be resolved for the military pensioner, the number of uniformed veterans will increase annually and this allocation will have to be accorded its own fiscal autonomy.
The total defence allocation minus pensions now works out to 1.58 percent of estimated GDP for 2018-19 and this is the second trend that is noteworthy. Over the last decade, from 2009-10 to 2017-18, the defence allocation as a percentage of GDP has declined from 2.19 to 1.65 percent. This now stands at 1.58 percent. It appears that successive governments have come to a determination that defence allocation can be gradually reduced without adverse impact on the national interest.
Consequently, the fiscal support to the training, modernisation and inventory-acquisition of the armed forces will become even more constrained due to fiscal pressure and the fallout of this be felt on the operational profile of the Indian military.
The comparison with the previous year’s allocation sheds more light on the national security dilemma for India. In the last budget presented in February 2017, the Finance Minister allocated Rs 2,42,403 crore for defence in the fiscal 2017-18. With the pension amount added, this total went up to Rs 3,59,854 crore for defence alone. The comparable figure for this year, fiscal 2018-19, is Rs.4,04,364 crore ($63 billion).
This is not an insignificant amount in a country where poverty is stark and millions live below or hover near the subsistence level. However, many anomalies abound as far as the Indian security profile is concerned. For a nation that can legitimately take pride in its indigenous capability at the macro end of the spectrum (nuclear weapons, missiles, nuclear submarines and satellites), it is woefully deficient at the middle and lower end of the military inventory spectrum.
The just-concluded Republic Day parade on January 26 illustrated this in a vivid manner. Most of the platforms and ordnance delivering guns are of foreign origin — from Russia in the main. The majority of India’s tanks, ships and fighter aircraft are of ex-Soviet (now Russian) design and while some have been assembled in India, the reality is that India is yet to acquire the appropriate levels of design and manufacture even for basic inventory like personal weapon