This Budget disastrous for Indian Armed Forces modernization
 Source : News Bharati English  Date : 01-Mar-2013

2013-14 Budget disastrous for Indian Armed Forces modernization

Modernising Indian Armed Forces does not seem a priority of politicians. This ignorance may result in a disaster for the nation, if a full fledge armed conflict arises, as both our hostile neighbors are way much ahead in modernizing their armies. Brig Mahajan tells…

 - Brig Hemant Mahajan

$img_titleIndian Army has been described as a first-rate army with second-rate equipment. Because of mismanagement by government most of the equipment held is very old. India’s armoured regiments require 1000 main battle tanks [MBT] T-90S. T-72 Ajeya has to be upgraded to increase its life & capabilities. Artillery was last upgraded in mid 1980s.The Corps of Army Air Defense has obsolete equipment that needs replacement. India also needs to raise and suitably equip mountain strike divisions to carry the fight into Chinese territory. Modernisation plan of India’s cutting edge Infantry battalions is moving at snail’s pace.

10 seconds for national security & defence budget speech

Defence is not a particularly endearing subject for India's parliamentarians. Up to last year, the finance minister used to include two or three sentences about defence funding in his Budget speech. After acknowledging the contribution made by the defence forces, he would give the usual assurance by intoning "that where defence of the country is concerned money would not be a consideration."

In the budget speech 2013-14 Finance Minister P. Chidambaram devoted less than 10 seconds to National Security & defense budget, out of a total speech of two hours. The Prime minister after acknowledging the contribution made by the defense forces gave the usual assurance by intoning "that where defense of the country is concerned money would not be a consideration, during his after budget interview." It has always been a hollow promise & has never resulted in any increase in allotment in last 9 years. The Defence Minister spoke only about difficulties in economy.

In its budget for 2012-13 the Government had allocated Rs. 1,93,000 crores for the Defense Services. In the budget for 2013-14 Government has allocated Rs. 2,03,000 crores. The defense budget for 2013-14 has increased by 1 per cent over the previous year. The capital budget is Rs. 86,000 crores (used mainly for defence modernization). Thus the Revenue Expenditure would be Rs. 1,17,000 crores.

Impact on Modernization

The Indian Armed Forces have not been modernized for nearly 20 years. After the Rs 14,000 crore cut in defence spending in the last financial year, the armed forces had to prune their procurement lists.

The Army's priority list includes: -

  • Replacement of the Bofors artillery with the OFB upgraded 155 mm gun of longer range,
  • modern artillery ammunition (bi-modular charges, fuzes etc),
  • Assault rifles for Infantry (trials underway),
  • Bullet proof jackets/helmets for CI operations,
  • Tank ammunition (INVARS missile for T-90 tanks)

The Air Force wants Fighter, transport and helicopter procurement.

The Navy’s priority list includes acquiring 16 multi-role maritime helicopters and 56 utility helicopters. It also includes minesweepers and the new line of conventional submarines under Project 75I.

Stalled Modernization

The most pertinent question is whether the latest budget makes necessary provisions to meet these requirements Given the fact that the modernization programme of the armed forces largely depends on capital acquisitions, it boils down to how capital budget is allocated. The Indian defense budget must possibly be the most opaque document in the world. The government is very shy of revealing actual figures in public domain. Hence the guesstimate. Assuming that nearly 60 per cent of capital budjet is committed liabilities (payment of contracts already concluded /awarded) and 40 per cent of new schemes, the main sub-divisions of the capital budget would be as below:

Total Capital Budget: Rs. 86,000 crores.ie 42.36% of total budget. Capital Acquisition could be Rs. 51,600 crores, Committed Liabilities could be Rs.34,400 crores, New Schemes would be Rs.17,200 crores. This is highly inadequate.

India's defense budget is less than half of China's officially claimed figure, the military gap between India and China is growing every year. India needs to invest more in improving the logistics infrastructure along the border with Tibet, make up deficiency of ammunition & modernize its aging military equipment.

India's long-term rivals, Pakistan and China, allocate around 3.5% and 4.3% of GDP to defense, respectively while India has been allotting less than 2.5%. US military aid of more than $10 billion is being misused by Pakistan to modernize its army.

The UPA government who provided thousands of crores for various subsidies, pegged the defense budget below 2.5 percent of the GDP for most of its tenure. Despite small increases in annual defense budgets since 2001 (5 to 6 %), expenditure has decreased in real terms as the contracted inflation rate has been over 10-12 % (Increase in price of contracted equipment ).Since we buy nearly 70 % of our new equipment from abroad,  % of increase in budget should  more than the contracted inflation rate. There is a glaring shortfall in what is required by the services and what they are allocated. Modernization is also casualty of corruption and paralyzing bureaucratic procedures.

Allocation & underutilisation of resources in the budget

As the defence preparedness of the country largely depends on the firepower it possess, which in turn depends on capital expenditure, the latter’s timely and efficient utilisation deserves due consideration. The underutilization of resources allocated under the capital head in the defense budget has been growing at a rather alarming rate. In absolute numbers, the underutilization has increased by greatly. The MoD, in recent years has miserably failed to improve acquisition procedures, the recurring underutilization of resources highlights the weakness in the system.

Final Thoughts

Corruption, allegations of impropriety and tortuous contractual procedural arrangements continue to hamper much-needed modernization of the Indian Armed Forces. Thus even with a Defense Minister who has a reputation of being squeaky clean, the process of arms acquisitions is caught in a permanent bind of suspicion affecting the modernization of Armed Forces. It has to be ensured that the budget is increased to 3%of GDP, so that adequete finances are available for modernization. The DRDO is called secret weapon of Pakistan because of inordinate delays in all its projects. Its performance needs to be monitored strictly.

Let the defense minister also explain his ministry’s pathetic record on defense spending under his watch. What, to his mind, is the optimum capital to revenue expenditure ratio for national defense? How can it be achieved, if capital spending is either being reappropriated into revenue expenditure or being returned unutilized? Should the defense spending be related to the national GDP or should there be a quadrennial defense review conducted by the government to determine the budget for the defense Long Term Procurement Plan?


About Brig. Hemant Mahajan

Brig Hemant Mahajan Brigadier Hemant Mahajan (YSM) joined armed forces since 1973. Started his military life as an officer with the ‘7 Maratha Light Infantry’. Brig. Mahajan has served in the most sensitive areas like Jammu & Kashmir, Punjab, North Eastern states. Importantly Brig. Mahajan had an experience of serving his duty in highest and tough warzone like Kargil, handling peace situation in furious Punjab after the ‘Operational Blue Star’ and the Ayodhya region. Along with ‘Yuddh Seva Medal’, Brig. Mahajan is recipient of various Military awards for his excellent track record.

He is a defence analyst & a avid writer focussing on India's security scenerio.