India’s finance minister presented the budget amid rumpus. She stammered a lot and avoided readingout defence allocations. When questioned why the finance minister didn’t mention the defence budget allocation during her speech, NITI Aayog Vice Chairman Rajiv Kumar said that It’s (Defence) was not a part of the speech but it’s there in the Budget. Opposition leaders have criticised the budget for being pro-industrialist. Instead of cutting down wasteful expenditure, the budget provides for disinvestment off vital assets.
The true quantum of the allocations could be ascertained as and when the actual documents along with Explanatory Memorandum become available. However, information published in the media is pretty shocking.
Riding the China bogey, the armed forced went on a rapacious spending spree. Prime minister Narendra Modi had told the all-party conference that China had not trespassed an inch of Indian territory. As such, media hype about Chinese aggression amounts to a storm in a tea cup. Indian Armed forces exploited the China factor to overspend their budget for capital expenditures by Rs 23,000 crore last year. Norms of budgetary discipline were blatantly violated. Still, the new budget provided 0.4% hike in capital expenditure in the defence budget. The budget allocated further Rs 1.35 lakh crore for additional capital expenditure. The total outlay for the defence ministry, including the aforementioned capital expenditure, is Rs 4.78 lakh crores
The total allocation for defence services in 2021-22, including pensions, is Rs 4.78 lakh crore compared to Rs 4.71 lakh crore, last year. Without pension allocation, it is Rs 3.62 lakh crore in comparison to last year’s Rs. 3.37 lakh crore.
How reckless the armed forces were in spending
The capital is meant to purchase fighter jets, submarines, helicopters and other modern military systems. It has been increased from Rs 1, 13,734 crore last year to Rs 1, 35,060 crore, a whopping 19 per cent hike. During the Ladakh standoff with China, a lot of emergency purchases were made.
Last year, the Indian Air Force overspent Rs 11,773 crore and the Navy overspent Rs 10,854 crore over their budget. In comparison, the Army overspent Rs 821 crore above its allocation.
The Indian Navy spent nearly Rs 5000 crore extra on its fleet. According to the media, the budget documents cryptically say, `The Air Force increased its expenditure to procure several equipment and special projects’.
The engineers also fished in hot waters. While the estimated budget for the civil work was Rs 14,500 crore, it increased to Rs 15,914.06 crore as the government spent on building infrastructure in border areas.
In this year’s budget, the capital outlay for the Indian Army is Rs 36,481 crore, for Air Force it is Rs 53, 214 crore and for the Navy, it’s Rs 33,253 crore.
Ignoring principles of financial propriety, the government has created a NON-LAPSABLE FUNDS FOR DEFENCE. The details are a guarded secret.
Deceptive figures
India showcases its ‘transparent’ military expenditures on websites. India unnoticeably increased its military outlays in revised and then actual estimates. Thus the actual military expenditure is much higher than the initial estimates, quoted in international media under a hypnotic spell.
To hoodwink general reader, India deflates its military expenditure through clever stratagems. It publishes its `demands for grants for “defence” services’ separately from demands for grants of civil ministries that includes its defence ministry (MoD).
It clubs military pensions in civil estimates. There are several other quasi-military provisions that are similarly shoved in civil estimates. Such concealed defence provisions include public-sector undertakings under MoD like dockyards, machine tool industries (Mishra Dhatu Nigham), and Bharat Heavy Electrical Limited, besides space-and-nuke/chemical/biological-research projects, border and strategic roads and a host of paramilitary forces (Border Security Force, Industrial Reserve Force, etc.).
Why does India do so?
It does so to `lower’ its military budget as a proportion of Gross National Product. Through such ploys, India, as compared with its neighbours, gets a favourable image in The Military Balance, Jane’s Defense, and other international magazines.
The analyses of India’s military spending suffer from an inherent shortcoming. They have to rely on figures showcased by India on official websites. As such, the true quantum of military budget is deflated. The deflated figures are used to make inter-country, inter-region or endogenous comparisons like military budget as proportion of total civil and military outlay.
Without a hard copy of Explanatory Memorandum to Demands for Grants, it is difficult to analyse the budget.
The memorandum could throw light on India’s mega purchases. They include carbine rifles for army, Rafales, Teja light combat aircrafts, Advanced Jet Trainers, Airborne Warning and Control system, additional Mi-17 Helicopters, MiG-29 upgrade, Low-Level Transportable Radar, Integrated Air Command and Control System and Surveillance Radar Element in respect for the air force. Weapon Locating Radar and T- 72 upgrade in respect of the Army, Rafales,
Terminal High Altitude Area Defense (THAAD), Patriot Advanced Capability (PAC-3) missile defence systems as an alternative to the Russian S-400 system. India ditched Russia from whom it had decided to purchase five S-400s Russian S-400s air defence systems at cost of US$5.4 billion. With US tacit support, India is getting tougher with China.
There was a 73-day standoff on the Doklam (Donglang in Chinese) plateau near the Nathula Pass on Sikkim border last year. Being at a disadvantage vis-a-vis India, China was compelled to resolve the stand-off through negotiations. In the later period, China developed high-altitude “electromagnetic catapult” rockets for its artillery units to liquidate Indian advantage there, as also in Tibet Autonomous Region. China intends to mount a magnetically-propelled high-velocity rail-gun on its 10,000-ton-class missile destroyer 055 being built.
Misconception
Indian policy of increasing her military outlays is based on strategic misconceptions. India thinks it would be suicidal for Pakistan to increase her military budget pari passu with India’s. In any case, Pakistan could not afford to spend more than half the increase in India’s military budget. A higher allocation would sap Pakistan’s resource potential for growth in future.
India thinks Pakistan has to choose between Scylla and Charybdis, that is economic collapse or military preparation.
India’s perceptions historically have proved to be wrong. Pakistan neutralised the impact of this differential economic performance by, going nuclear, and developing tactical nuclear weapons like Nasr short-range missile.
A digression on Pakistan’s defence budget
The surreptitious manner in which India’s defence budget has been presented should open eyes of those who criticise Pakistan’s defence budget. The main criticism of Pakistan’s defence budget is that Pakistan’s defence outlay is given in lumps sum. But, that does not mean it is kept secret. The details are available with relevant sections of the defence ministry. The ministry is under the defence minister, not the army chief or General Headquarters. So elected representatives can get any piece of information that they need.
The main points of criticism by defence-bashing lobby are well articulated by Hafiz A. Pasha, in his book Growth and Inequality in Pakistan: Agenda for Reforms (page 385), as follows:
a. `The military has been considered as a kind of `sacred cow’ in Pakistan. The perception has been augmented by the role played either directly or indirectly by the defence establishment in the running of the affairs of the country’.
b. `The most vivid demonstration of the special status of the military is that the defence budget is not subject to any Parliamentary scrutiny as part of the Federal budget approval process given in the Constitution of Pakistan. Inclusive of pensions and the cost of para-military forces the lump sum budgetary allocation for defence in 2018-19 is Rs. 1492 billion. This is equivalent to over30 per cent of the total projected federal current expenditure budget for the year’.
c. The level of defence expenditure has gone up from 3.4 percent of the GDP in 2007-08 to 4 percent of the GDP in 2017-18, due primarily to the cost of fight against terrorism in the country’.
Conclusion
The allegation of “intervention” in the country’s affairs is too presumptuous to merit a reply. The parliamentarians lack the ability to scrutinize the budget. Budgetary analysis is a technical task which could be done only by qualified people in ministries. India’s rising defence outlays ratchet up Pak defence allocations. Being a smaller country, with a smaller GDP, Pakistan can’t raise its defence outlay pari passu with India’s.
Lt Gen Attiqur Rehman in Our Defence Cause says: “In a democracy, the defence services belong to the people through their representatives in parliament. Thus, the people have the right to know what is going on, how their money is being spent, and how the defence services are being managed and administered. In fact, they have a right to know everything, except details of the actual war plans.”
Pakistan’s defence demands undergo a rigorous scrutiny by relevant parliamentary committees and audit bodies. Legislators and MoD babus are properly briefed about the need for provisions. Whenever demanded, the details of the defence budget for the current, as well as for the coming, financial year were placed before the parliament. Even the expenditure on Zarb-e-Azb appeared more than once in the media.
Most legislators lack acumen to analyse numerical rigmarole. So they themselves do not wish to be bothered with the job being done by competent professionals in various ministries and parliamentary committees.
Pakistan should separate expenditure of forces to defend China Pakistan Economic Corridor and key installations including parliament from normal demands for defence grants.
A bitter lesson of history is that only such states survived and were able to strike a balance between constraints of security and welfare. Garrison or warrior states vanished as if they never existed. Client states, living on doles from powerful states, ended up as banana republics. We should at least learn from the European security experience.
History shows some states collapsed suddenly while others decayed gradually. Just think of what great status were empires like Austria-Hungary, Spain, Portugal, the Netherlands, Sweden and Tsarist Russia (exposed to the 1917 revolution) and even the erstwhile USSR.
A common feature of all strong states had been that they had strong military and civil institutions, de jure capability to defend their territory and policies that favoured the citizenry rather than dominant classes — feudal lords, industrial robber barons and others.
