The Modi Government’s first real annual Budget is perhaps its most important test after flunking the Delhi Assembly examination.
Businessmen will be watching it to gauge the intentions and determination of the Government to create a pro-business atmosphere in the country. But equally it will be eagerly watched by the armed forces community.
This is because it will provide the signal as to the extent to which the Government is committed towards accelerating their delayed modernisation.
The three services have their big-ticket wish list – Rafale for the IAF, seed money for the Army’s mountain corps, the helicopters, missiles and submarines for the Navy.
But they also have equally urgent requirements for plugging gaps and consolidating existing holdings.
The problem as the Rs 2,29,000 crore interim defence budget of July 2014 reveals is that – 39 per cent is spent on pay and allowances, 11 per cent on maintaining existing holdings, another 9 per cent on miscellaneous things like housing and transportation.
Only Rs 94,588 crore (41 per cent) is available for new acquisitions. Even this is misleading as the capital budget contains money that must be paid out for past acquisitions, besides the needs of the DRDO and ongoing constructions in Indian factories and yards such as the new INS Viraat, for whom a sum of Rs 1,200 crore were appropriated.
The two big projects, going head to head as it were, are the Air Force’s Rafale multi-role fighter whose estimates are Rs 120,000 crore, and the Army’s mountain corps which also requires a like amount, if you take into account its ancillary requirement of a division worth of medical and engineering troops.
These are heady sums, and even if broken up into yearly installments, they could distort defence acquisitions since they would leave little or no money for other equally critical needs such as artillery guns for the Army, the replacement of light utility helicopters, minesweepers for the Navy, and so on.
The Government’s headaches will be compounded by the fact that the Army’s mountain corps has already been raised.
The Army skimmed off personnel from its 300 plus battalions, which are usually about 900 strong, and whose pay and allowances have already been budgeted for.
Their equipment came from the war wastage reserves (WWR). So while the WWR now stands at alarmingly low levels, the Indian Army does have an addition corps which has added an important element in the order of battle in the country’s northern border.
In the past five years, the ITBP which polices the border has been reporting a sharp increase of Chinese patrolling and presence along 14 or so points on the LAC that defines the Sino-Indian border where Chinese claims and ours overlap.
Tight budget: According to the latest figures only Rs 94,588 crore (41 per cent) is available for new defence acquisitions
Further, the Chinese presence is not only more insistent, it is now often leavened by locals who demand that the Indian side go back to their side of the border.
Two recent manifestations of changed behaviour were the Chinese encampment in the Depsang Plains which stoked off a crisis in April-May 2013 and the massing of troops in the Churmur area at the junction of Himachal Pradesh and Ladakh during Xi Jinping’s official visit to India last September.
Actually, the Army will increase its strength by nearly 90,000 in the coming years taking its strength up to 1.26 million.
This is not a good sign since this will require a significant enhancement of the Army’s budget in the coming years, with a comparative pressure on the capital needs of the IAF and the Indian Navy, as well, indeed, on the modernisation requirements of the Army itself.
Army leaders see this as inescapable since the two principal threats to the country come from over the land borders with Pakistan and China.
In the past, the armed forces were told that they needed to maintain a deterrence posture with Pakistan, which included the possibility of launching a war into Pakistani territory.
In the case of China, the instructions were to plan a purely defensive battle along the mountain frontier.
With the PLA modernisation and force accretions in Tibet, the Indian Army cannot undertake its tasks in a purely defensive deployment.
Equally important is the fact that over the years, coordination between Pakistan and China has, if anything, been intensifying.
During the 1965 and 1971 wars, the Chinese did not intervene on Pakistan’s behalf. But they made some pretty scary threats to do so.
The issue confronting military planners now is: What if the next time around, China does indeed intervene?
The Chinese are masters of timing and it is difficult to forget their 1975 operation to eject the South Vietnamese forces and occupy the Paracel Islands during the closing phase of the war that unified Vietnam, ironically with Chinese help.
The problem is not that the armed forces demands are excessive, but the challenge of meeting them in a manner which does not deflect India from its goal of long-term economic growth, which at the present juncture requires massive investments in infrastructure and manufacturing industries.
The way to go is to sharply tighten the management of our armed forces, which means cutting waste and needless redundancies.
The first step here is to enforce the concept of an integrated military where acquisitions planning can be standardised and prioritised.
Priority: Finance Minister Arun Jaitley must make India's defence funding a priority in his Budget
Acquisitions are important, but there is equal need for reorganising the command and control of the armed forces to emphasise integrated functioning.
The second is to create an expert civilian bureaucracy which can undertake the task instead of the inexpert one at present which exercises power by emphasising procedure over subject specialisation.
These are tasks that cannot be left to the armed forces leadership or the Ministry of Defence. It is something that Prime Minister Modi and his colleagues in the Cabinet Committee on Security need to sort out urgently.
Mail Today Februrary 16, 2015