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Defence allocations -- Higher, but necessary

H. Kaushal

THE 28.2 per cent increase in the Defence allocation in the 2000-01 Budget over the previous year is significant, on two counts. First, this is not the complete picture, as the funds for nuclear deterrence have not been included. The nuclear doctrine, fo rmulated by the National Security Advisory Board, had recommended the delivery of nuclear warheads by air, land and sea. The costs for this were estimated at 0.5 per cent of GDP. Some expenses have been incurred and more are expected in the coming financ ial year.

While there was all-round relief that the Government did not impose the Kargil tax earlier to recover the Rs. 1,984 crores spent in May-July 1999, analysts argue that funds spent on Defence deprive such social development projects as healthcare, educatio n, or drinking-water supply schemes.

Heavy Defence spending in a year of growing fiscal deficit is unfortunate. The Finance Minister, Mr. Yashwant Sinha, compounded the misery by announcing that 0.6 per cent of the deficit was due to the additional Defence allocations. There is unanimous ag reement that such a hike is a one-time, Kargil-related exception.

Here lies the rub because, after the `highest-ever hike', the Defence allocations are Rs. 58,587 crores, or a little over 3 per cent of GDP. This is quite acceptable as, between 1962 and 1986, India spent 3 per cent or more of GDP on Defence. Cuts in the Defence budget began only after 1987, and successive governments let Defence-preparedness suffer by letting things slide.

The world average is 2.5 per cent of GDP for Defence. A country such as India, placed in a hostile environment, is bound to suffer if it persists with levels of 2.3 per cent of GDP for Defence, as was the case last year. No wonder the armed forces suffer ed greater casualties in the Kargil operations because of poor equipment.

Pakistan and China have been spending more than 5 per cent and 4 per cent of GDP on Defence, respectively, for decades. No wonder the National Advisory Board had to recommend the current higher allocation for Defence. There is little chance of this perce ntage coming down.

What does this actually mean? Defence allocations in the 1999-2000 Budget were Rs. 45,694 crores, but before the year was over, the supplementary demands jacked this figure up to Rs. 48,504 crores. The hike, thus, works out to Rs. 10,083 crores from the supplementary demands. This increase includes the Rs. 1,800 crores for maintaining a division in the high-altitude Kargil sector.

In real terms, the increase is just Rs. 8,283 crores, or 20 per cent. The increases were 20 per cent, 17 per cent and 11 per cent in 1997-98, 1998-99 and 1999-2000, respectively. Second, the hikes were always higher in the years following wars; it was as high as 72.5 per cent in 1963-64 over 1962-63. The higher Defence allocations is not linked to any significant increase in manpower levels _ that is, no additional staff is expected to be added. The emphasis is likely to be on acquisition of stores for the introduction and maintenance of new systems. Some Rs. 1,000 crores of the increased allocations is likely to be for purchases.

Half this amount is on the capital account for modernisation. This list is rather long and is unlikely to be covered by the increased allocations this year alone. Funding the DRDO and indigenous production/development projects will be in addition to the projects listed above. It is, therefore, unlikely that all these projects will be covered by the present allocations.

Major Defence projects, in any case, involve two-three budgetary periods, because of their varying durations and the fact that the funds are required mostly in foreign exchange. The government must ensure that the funds to complete the projects are made available in subsequent Budgets. This is different from the general statements made by the Prime Minister and the Finance Minister that more funds will be made available, if required.

The nature of the projects and the present allocations are further indications that the nation should be prepared for this level of Defence allocation for some years to come.

But machines, however sophisticated, do not win wars. The men behind the machines continue to be all-important. The optimal benefits of technology can be derived if the machines are selected with care to match the roles they are required to play. This is a professional task. Unfortunately, the Defence acquisition decisions continue to require the approval of the Defence Ministry babudom. This delays decision-making considerably, and makes much of the planning by the Defence headquarters meaningless.

There is an urgent need for the Defence services to start preparing perspective plans, which should be critically examined at all levels and matched with the requisite resources. The babus _ politicians or bureaucrats _ should thereafter be de-linked fro m the implementation of these plans and let the professionals do their job unhindered. Initiating acquisitions without adequate planning is not cost-effective. Planning also involves preparing the men who will use the machines for complete integration of the systems. This means extensive training and planning.

The Budget figures cannot be viewed in isolation to the tasks. The armed forces have had to assign considerable resources to tasks strictly not in their charter. For example, counter-insurgency. The operations in J and K and the North-East cost Rs. 850 c rores and Rs. 700 crores per annum, respectively. Counter-insurgency alone places an additional burden of about Rs. 4,000 crores per year on the armed forces.

India is in a very difficult phase of Defence requirement. On the one hand, the people have been lulled into believing for a decade-and-a-half that 2.3 per cent of GDP, without any long-term planning, would suffice for a peace-loving country such as Indi a. On the other, the environment in which the country is placed is worsening progressively. With India's neighbours including the Taliban, a Pakistan under military rule, China nursing the hurt of India's nuclear capability and its support to the religio us movement in Tibet, things are not ideal from the Defence point of view.

The armed forces must prepare strategic/tactical plans in the light of these threat perceptions, while bus diplomacy can continue. These plans must get firm financial commitment, after being approved by the government. The decision-making procedure for D efence projects needs to be reviewed and professionalised, and authority-responsibility links established.

Politicians may try to get mileage out of their `magnanimous' Defence allocation, but both Russia and the US have unofficially accepted that India needs this level of allocation. Such allocations would perhaps be normal in future and not seen as one-time , bullet-biting operations.

(The author is a Pune-based freelance writer.)