Monday, March 03, 2008

Our politicians are good at splurging public funds

This article was written on the eve of the Union Budget for 2008-09. Its focus was not the expected Rs 60,000 crores giveaway in the form of the loan waiver, but the expenditure of nearly Rs 150,000 crores for defence and security without any effort to monitor the expenditure, or propose economies which would make our forces more effective, if smaller in size.

The budget documents have already been sealed and are ready to be tabled in Parliament. So a plea for a hard look at our humongous security budget would make little difference. It could have provided some perspective in the budget debate, but that is if and when the Lok Sabha begins to actually debate budgets, rather than rubber-stamp them. So this is really for the public record.

The coming budget will see the annual outlay for defence breaching the Rs 100,000 crore barrier for the first time. This only covers the three wings of the armed forces and not the central police forces, intelligence services and the defence-related components of the departments of nuclear energy and space. Neither does it factor in the rising pension bill which amounted to Rs 14,600 crores last year. If all these were to be totaled up, the expenditure on security would be nearer to Rs 150,000 crores. For all this, are we getting the best bang for the buck — the short answer is, no. Our military may be the envy of the region, but the security threats within — the continuing insurgencies in the east, the growth of Maoism, and terrorism — make us appear hollow.


The defence budget is the largest single departmental item in the Union budget, exceeded only by the Rs 150,000 crores paid as interest payments on internal and external debt. Yet it does not get the kind of scrutiny that other components get. With an economist Prime Minister and Finance Minister, the civilian side of the demands get a thorough political screening. But on the defence side, the system is that the services make their demands, civilians from the generalist bureaucracy make sure that the i's are dotted and the t's crossed, and pass them on to the politicians.

Being entirely devoid of any expertise or help, the politicians in the Cabinet use the simple arithmetical formula — so much for plan expenditure, so much left over for interest payments on loans, add to this the sums for fertiliser and other subsidies, and the balance is kept for defence. This should cover the normal rise in pay and allowances of the forces, maintenance of existing assets and provide for some modernisation. Expenditure on education, rural development, environment, health and family welfare come, in the main, from plan expenditure, and in any case totaled some Rs 86,000 crores in the past year.

Given the huge claim on resources by a hungry, illiterate and unemployed population, such an approach is scandalous. But there it is. Instead of scrutinising the expenditure and directing economies, Members of Parliament not only rubber-stamp the demands, but often demand additional spending.

Till 2000, the political system made little or no effort to overhaul the system. Then, the Vajpayee government constituted a Group of Ministers to suggest a set of reforms for the national security system. In May 2001, the Cabinet approved all 24 recommendations of the GoM, but it deferred appointing the Chief of Defence Staff, pending consultations with various political parties.

Five years later we have not moved an inch. An integrated staff organisation has been created, but it remains headless because ill-informed considerations have persuaded the Congress-led United Progressive Alliance government not to press ahead. The result is, that the person who would become the chief military adviser of the government, and coordinate the far reaching reform on equipping and managing our defence system, remains to be appointed.

In 1952, the government of the day arbitrarily decreed that the defence forces headquarters would become an “attached office” of the Ministry of Defence. The manual of office procedures decrees that while “departments” like the MoD could make policy, their “attached offices” merely implemented it. Since then, all policy is made by the Ministry, though the factual position is that they never take major decisions without consulting with the armed forces, not because they think this is a good thing, but because they lack the technical expertise to make them.


The decision at the time reflected a fear in the minds of the civilian leaders, including Pandit Nehru, of the armed forces. Remarkably enough, two years ago, a top functionary of the government told me that the reason why the CDS idea would not fly with the UPA was because Sonia Gandhi felt that it could encourage a “coup”. The dynasty's view, no doubt shaped by bureaucrats and intelligence officers who themselves hold vast unaccountable powers, clearly trumps all reason and the 60 years of disciplined service the armed forces have given to the country.

The current system of individual services is not only inefficient, but it adds needless costs and creates security gaps. The Army and Air Force maintain two separate infrastructure for training, spares support, repair and overhaul of their helicopter fleets. As Air Marshal Brijesh Jayal has pointed out in Vayu, one of the reasons why the Kargil incursion was not discovered was that the Army was using hand-held cameras for tactical reconnaissance from helicopters, an improvisation that could not work because of the high vibration levels in a chopper. They did not think of calling on the Air Force to do the job with the help of their sophisticated photo and thermal imaging equipment. But perhaps even if they had done so, the Air Force may have demurred with this or that excuse.

Because the government cannot decide on a CDS, which would, over time, lead to integrated commands, India is blessed with 18 or so regional commands of the three services; most are not co-located. The Army's eastern command is in Kolkata, the Navy's at Vizag and the Air Force’s is at Shillong. The huge savings that could come with half the number of command establishments are manifest. So are the efficiencies that would come with fusing the three wings of the armed forces into one integrated force.

If the government does not want a CDS, they must decide on an alternative system to coordinate and arbitrate between the demands of the three services.Obviously the person or the institution must have the requisite expertise. That is why the CDS was seen as a tri-service institution where the single-service identity of the officers would slowly meld into one. New communications technologies have brought a revolution in military affairs. But to take advantage of the revolution, you need new structures and organisations.


So when the defence budget comes up on Friday and then is allegedly debated by our Parliament, there will be little effort at scrutiny or a pause for some introspection. There will be no suggestions at saving a couple of thousand crores from the huge security expenditure to meet urgent needs in the field of public health or infrastructure. Since no one has thought it through, for example, the very serious implications— political and financial— of the missile defence system that the DRDO is touting, a couple of hundred crores will be given to them to go ahead. Similar sums will be dished out to this or that scheme without any thought. The primary issue is not cost; after all a country will willingly pay what it must to secure itself. It is the efficacy, or to be precise the lack of it, of the way the present system functions.

In the absence of any political audit, our technology czars and bureaucrats will squander ever larger sums of money without check. So we will have missiles that don’t work, tanks and aircraft that are unlikely to see war, or at least the kind that requires tanks and fighters. Nothing in the performance of the UPA government, or its ministers associated with security, suggests that they are capable of understanding these issues, let alone acting on them.

This article appeared in Mail Today February 27, 2008

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