Defence budget low? Make best of it

Bhartendu Kumar Singh
Indian Defence Accounts Service

WORLD over, liberal-democratic governments are redefining and expanding the national security concept. India is no exception. Therefore, the recent budgetary allocation for defence, pegged at Rs 2.95 lakh crore (excluding defence pensions), should be seen in the light of India's endeavours towards comprehensive national security. However, some strategic experts miss the big picture in being critical about the low budgetary allotments. Equally unfortunate is the fact that there is no debate about making the best of defence budget. 

True, the defence budget has been coming down as a proportion of GDP or Central Government expenditure. There is also no probability of the proportion going up. But this is perhaps because of the early political consensus for according priority to economic aspects of national security. The downfall of the then Soviet Union was primarily because of overt emphasis on military security. This fact was not lost on India's policy makers and partly contributed to the economic reforms of 1991. Since then, India has been giving primacy to economic security and well-being.  

Declining defence budgets are not unique to India; rather the trend is ubiquitous. For instance, according to a BBC report, between 2010 and 2015, the UK defence budget came down by 18 percent after inflation adjustment compared to 2009-10 budget. Similarly, defence budgets have been declining in the US and other NATO countries in percentage terms and are nowhere comparABLE TO to Cold War proportions. While the decline in great power conflicts and Cold War mentality are certainly the causal factors, it is also true that there has been a renewed emphasis on comprehensive national security.  

It is this global picture that is being missed out in India. India has a national security debate that is largely perceived in militaristic terms and has no correlation with other aspects of national security. The series of hunger deaths, farmer deaths, illiteracy, backwardness etc do not figure in this national security discourse. The counter-narrative to this one-sided monologue is often suppressed under the rubric of 'emotional nationalism'. One dare not argue that India needs to expand its economic base for futuristic and meaningful investments in defence. Even in the US that has a highly militarised agenda and accounts for almost half of the global defence expenditure, there is reasonable emphasis on economic aspects of security in the National Security Strategy (NSS) of December 2017.  

Perhaps the first issue that needs debate is expenditure management in armed forces. As evident from budgetary propositions, revenue expenditure is exploding, threatening to touch Rs 2 lakh crore. The Army, accounting for more than 50 per cent of the defence budget, has an unhealthy revenue capital ratio of 80:20. The proportion is slightly better in other two arms since they are capital intensive. The ideational revenue capital ratio of 40:60 (prevalent in many armed forces) is perhaps an unachievable goal. Worse, the revenue expenditure is increasingly eating into capital resources, leaving little money to buy sophisticated arms. An inhouse introspection is long overdue, since the three services have conveniently skipped the issues. 

Resource management in armed forces also needs debate. In an environment where every penny counts, there is no awareness or sensitivity for resource and asset management in armed forces. Potential resources in armed forces are yet to be tapped in many greenfield areas and rent and revenue generation are far below expected benchmarks. True, commercial involvement and combat effectiveness are not evenly correlated and the opinions are quite divided in the academic literature. The Chinese PLA experience of commercial activities in late eighties and early nineties was bad, denting their combat capabilities. Hence, the Indian debate should consider global experience before experimenting it inhouse for generating revenues.

Prudent contract management also needs consideration and debate. Significant money is spent in paying for escalated cost of weaponry since they jump the timeline stipulated in the Defence Procurement Procedure (2016). Part of the reason is the isolated environment in which all stakeholders work and files move in creepy manner. If all stakeholders commit to collegiate knowledge sharing, the decision making would be faster and original cost would metamorphose into final cost. Similarly, developmental projects and works contracts for the armed forces also consume considerable time. Hardly any developmental contract or works contract are executed without time or cost escalation. These issues can be taken care of through stringent project monitoring and learning from global practices. 

Finally, the big ticket armaments through costly imports also need debate. Recent initiatives have boosted the domestic military industrial complex (MIC) but the impact would be visible only after four-five years leading to potential cost savings. The domestic MIC is competent to supply comparable artillery guns, missiles and fighter jets at competitive prices but needs preferential treatment. For example, the 155 mm artillery gun being produced at the Gun Carriage Factory (GCF) Jabalpur is much cheaper than comparable guns in international market. These domestic products would also save money and create jobs. 

While liberal budgetary allocations for defence are always welcome, marginalised issues in the 'guns vs butter' debate cannot be neglected. Therefore, instead of clamouring for 'more and more', the solution lies in debating ways and means to make the best of defence budget, at least until India's economic empowerment is complete. 

Views are personal