While the budget for the forthcoming year has been received with a couple of resounding hosannas, there should be the equivalent of gloom and doom in the defence sector for the meagre increase in the defence capital budget (which is meant for modernization) despite the enhanced challenges the Indian Military is facing on the northern and western borders, as well as in the hinterland where the continuing counter-insurgency operations are continuing unabated, while the designated armed police forces that are responsible for and have been raised for such tasks are being wasted on other tasks.
Coming to specifics, the defence budget has now hit the nadir of just about 1.48 per cent of the GDP. For a quick comparison, this figure matches the defence budget of 1962, when India was attacked by China and we suffered a humiliating defeat. For decades, the defence budget has been declining. It is only when an imminent challenge occurs, like the incursion by China’s PLA in April 2020 that we start making purchases in the international market for warlike equipment at exorbitant prices, instead of increasing funds for steady modernization.
The all-important capital outlay of the defence allocation for FY 2021-22 is Rs 1,35,000 crore, under which modernization of equipment and acquisition of new inventory takes place. Last year, the revised capital expenditure was Rs 1,34,510 crore. Hence the actual increase from the Revised Expenditure (RE) of last year to the budgeted capital allocation for this FY is a meagre Rs 500 crore!
The three services, army-navy-air force are in dire need of fiscal infusion to augment long-pending inventory depletions across the board. Thus, capital allocation is a critical indicator of the operational preparedness of the armed forces; in this respect, the situation should ring alarm bells.
Another aspect is the sub-allocations for the three services. Here, the game the Finance Ministry plays each year can be likened to the well-known idiom: “Rob Peter to pay Paul”. This year is no different.
The budget for the army has been increased by Rs 3,269 crore while reducing the budgets of Navy and Air Force. Last year, the revised capital expenditure was as follows: Army – Rs. 33213 crore; Navy – Rs 37,542 crore; and Air Force Rs 55,055 crore. In the current FY (2021-22), the budgeted capital allocation is Army – Rs 36,482 crore; Navy – Rs 33,254 crore; and Air Force – Rs 53, 215 crore. This does not help as there is hardly any modernisation in all the three services.
The bottom line is that it is time the armed forces get a continuously enhancing capital accounts budget so that modernisation can move apace in a deliberate manner, in accordance with the five-year plans drawn up by the services and since a CDS is now in place, moderated by the joint headquarters. The country will pay heavily if we carry on with the policy of starving the armed forces of the nation.