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In defence of the realm: The Indian Express
New Delhi, Feb 19: With the Budget round the corner, everyone seems to seek an answer to the question: how much would the defence budget for the coming year be?
New Delhi, Feb 19: With the Budget round the corner, everyone seems to seek an answer to the question: how much would the defence budget for the coming year be?
We will certainly know in a few days and it would be rash to try and put a figure on the likely increase at this stage. But, going by the past record, we may expect an increase of around 14-16 per cent above the revised estimates for the current year. The issue then would revolve around the figure of the actual expenditure for the year against the Budget estimates (of Rs 65,000 crore) for 2002-03.
The record of the past two years does not provide sufficient confidence in our ability to spend the full amount budgeted for. Actual expenditure for 2000-01 was Rs 49,622 crore (a whopping Rs 4,800 crore less than even the revised estimates) against the budgeted figure of Rs 58,587 crore, recording a spending level 15 per cent less than the budgetary allocations. The failure to spend such a large amount has essentially hit planned modernisation against the background of serious backlogs. Unfortunately, poor planning and decision making was once again demonstrated the following year when we failed to spend Rs 5,323 crore, in spite of additional unforeseen expenditure on account of the military mobilisation ordered in December 2001 after the terrorist attack on Parliament. Actual expenditure may, in fact, be even lower than the revised estimates for 2001-02, as has been the case in the previous year.
If we manage a hat-trick, not only would that set up some sort of a unique record for a country with fiscal deficits and acute shortages of resources, but it would deeply undermine any hope of building credible defence capabilities for the future in spite of the fact that we need conventional capabilities at a level higher than before simply because of the nuclearised environment. So far the problem has been explained by promising that the reforms in defence management would take care of the roadblock in procurement decision-making. While there can be many reasons for expenditure not fructifying within the financial year, the coming Budget would also test the efficacy of the reforms in defence management introduced more than two years ago.
A 14 per cent increase would take defence expenditure to around of Rs 74,000 crore, representing around 2.66 per cent of the GDP. This should be seen against the recommendation of the 11th Finance Commission, which catered for defence expenditure rising from the then level of 2.4 per cent to an affordable 3.0 per cent by 2004. Our defence spending level is currently around 15.5 per cent of Central expenditure. But the states do not spend on defence. Logically, defence expenditure must be calculated in relation to the total (Central plus state) expenditure, which may be around 8 per cent, but needs to be enhanced to around 9.5 per cent. The basic problem is that the current budget structure itself is not conducive to efficient decision making, leave alone effective expenditure control. With as much as 85 or more per cent of the annual Budget pre-committed, very little management and control is possible. There is also the question of parliamentary scrutiny of the Budget. For the past decade the bipartisan Standing Committee on Defence of Parliament has been examining the annual Budget in some detail, and reports to Parliament to enable it to be approved. But most of the Committee’s conclusions remain as recommendations and little else. We may not be able to institute the US system where parliamentary committees, in effect, exercise executive decisions, but it is time that the system is provided with greater authority so that a bipartisan approach to defence policy guided by the elected representatives is ensured. It also appears that the parliamentary boycott of the defence minister now has reached counter-productive levels in seeking accountability.
But, overall, the Budget should indicate to us the nature of defence capability that the expenditure would seek to create, at least in the broadest strategic terms. It is nearly four decades since China acquired nuclear weapons, and over 16 years since Pakistan possessed a “credible” nuclear deterrent. The nation is not quite clear how the defence establishment plans to apply military power to achieve political goals under these circumstances. Never before has this issue come as much to the fore as last year when the military was mobilised in an eyeball-to-eyeball confrontation, with the prime minister himself declaring the possibility of a fight to the finish. Inevitable questions have risen about the force structure, size and capabilities to achieve the type of political goals that would serve national interests in a nuclear weapons environment.
Logic, and global — besides regional — force modernisation trends, would indicate that air power would be a crucial element in applying any punitive conventional force for a variety of reasons. This becomes crucial for a country like ours which should seek to ensure adequate strategic space below the nuclear level to apply conventional military power. China’s military modernisation, now in full swing, is heavily biased toward power projection through air power. This would not only pose a new paradigm of air power balance in the future but the spin-off effect this would have on Pakistan also needs to be kept in mind.
Successive reports of the Standing Committee on Defence — the last one being the 18th Report, dated December 17, 2002 — have strongly pressed for the modernisation of the Indian Air Force and the expansion of force multipliers for it. Unfortunately, a 13 per cent shortfall in the IAF capital expenditure level last year and overall shortfalls in modernisation plans in spite of available funds goes counter to this. But force multiplication is no substitute for force. What is even more worrisome, therefore, is that leave alone acquiring force-multiplication capabilities for the IAF, the force level itself may well drop by nearly five combat squadrons (15 per cent of the authorised force) this year due to the expiry of the extended life of a fleet of MiG-21s with no replacement in sight for years.
Bureau Report
The record of the past two years does not provide sufficient confidence in our ability to spend the full amount budgeted for. Actual expenditure for 2000-01 was Rs 49,622 crore (a whopping Rs 4,800 crore less than even the revised estimates) against the budgeted figure of Rs 58,587 crore, recording a spending level 15 per cent less than the budgetary allocations. The failure to spend such a large amount has essentially hit planned modernisation against the background of serious backlogs. Unfortunately, poor planning and decision making was once again demonstrated the following year when we failed to spend Rs 5,323 crore, in spite of additional unforeseen expenditure on account of the military mobilisation ordered in December 2001 after the terrorist attack on Parliament. Actual expenditure may, in fact, be even lower than the revised estimates for 2001-02, as has been the case in the previous year.
If we manage a hat-trick, not only would that set up some sort of a unique record for a country with fiscal deficits and acute shortages of resources, but it would deeply undermine any hope of building credible defence capabilities for the future in spite of the fact that we need conventional capabilities at a level higher than before simply because of the nuclearised environment. So far the problem has been explained by promising that the reforms in defence management would take care of the roadblock in procurement decision-making. While there can be many reasons for expenditure not fructifying within the financial year, the coming Budget would also test the efficacy of the reforms in defence management introduced more than two years ago.
A 14 per cent increase would take defence expenditure to around of Rs 74,000 crore, representing around 2.66 per cent of the GDP. This should be seen against the recommendation of the 11th Finance Commission, which catered for defence expenditure rising from the then level of 2.4 per cent to an affordable 3.0 per cent by 2004. Our defence spending level is currently around 15.5 per cent of Central expenditure. But the states do not spend on defence. Logically, defence expenditure must be calculated in relation to the total (Central plus state) expenditure, which may be around 8 per cent, but needs to be enhanced to around 9.5 per cent. The basic problem is that the current budget structure itself is not conducive to efficient decision making, leave alone effective expenditure control. With as much as 85 or more per cent of the annual Budget pre-committed, very little management and control is possible. There is also the question of parliamentary scrutiny of the Budget. For the past decade the bipartisan Standing Committee on Defence of Parliament has been examining the annual Budget in some detail, and reports to Parliament to enable it to be approved. But most of the Committee’s conclusions remain as recommendations and little else. We may not be able to institute the US system where parliamentary committees, in effect, exercise executive decisions, but it is time that the system is provided with greater authority so that a bipartisan approach to defence policy guided by the elected representatives is ensured. It also appears that the parliamentary boycott of the defence minister now has reached counter-productive levels in seeking accountability.
But, overall, the Budget should indicate to us the nature of defence capability that the expenditure would seek to create, at least in the broadest strategic terms. It is nearly four decades since China acquired nuclear weapons, and over 16 years since Pakistan possessed a “credible” nuclear deterrent. The nation is not quite clear how the defence establishment plans to apply military power to achieve political goals under these circumstances. Never before has this issue come as much to the fore as last year when the military was mobilised in an eyeball-to-eyeball confrontation, with the prime minister himself declaring the possibility of a fight to the finish. Inevitable questions have risen about the force structure, size and capabilities to achieve the type of political goals that would serve national interests in a nuclear weapons environment.
Logic, and global — besides regional — force modernisation trends, would indicate that air power would be a crucial element in applying any punitive conventional force for a variety of reasons. This becomes crucial for a country like ours which should seek to ensure adequate strategic space below the nuclear level to apply conventional military power. China’s military modernisation, now in full swing, is heavily biased toward power projection through air power. This would not only pose a new paradigm of air power balance in the future but the spin-off effect this would have on Pakistan also needs to be kept in mind.
Successive reports of the Standing Committee on Defence — the last one being the 18th Report, dated December 17, 2002 — have strongly pressed for the modernisation of the Indian Air Force and the expansion of force multipliers for it. Unfortunately, a 13 per cent shortfall in the IAF capital expenditure level last year and overall shortfalls in modernisation plans in spite of available funds goes counter to this. But force multiplication is no substitute for force. What is even more worrisome, therefore, is that leave alone acquiring force-multiplication capabilities for the IAF, the force level itself may well drop by nearly five combat squadrons (15 per cent of the authorised force) this year due to the expiry of the extended life of a fleet of MiG-21s with no replacement in sight for years.
Bureau Report