Budget 2018 has stated the Government’s intent to develop the nation’s military capabilities both in terms of developing connectivity infrastructure and modernising the armed forces.

With the China-Pakistan Economic Corridor rapidly taking shape, the China-Pakistan embrace has got much tighter as has the convergence between China and Russia. China has intensified military engagements with several South Asian and Indian Ocean region states.

Most recent is the unconfirmed report of China exploring possibility of a military base in Wakhan Corridor, Afghanistan.

Big on belligerence

Since 2013, the level of belligerence along the Line of Actual Control has been increasing — Depsang, Chumar and the prolonged face-off at Doklam last year are indicative of this. From a small, ostensibly anti-piracy deployment in 2013-14 in the Gulf of Aden, the number Chinese warships and submarines in the Indian Ocean has been rising.

The scale and content of Chinese military exercises in Tibet and Xinjiang and the airforce joint exercise with Pakistan are noteworthy. In J&K, by the end of 2017, tensions along the line of control multiplied manifold. Effectively, there’s a continuous, ongoing sub-conventional conflict with high risk of escalation.

Alongside these direct security challenges are international expectations for India to be a net provider of security in the Indian Ocean and beyond.

The finance minister told Parliament, “To secure India’s defences, we are developing connectivity infrastructure in border areas.”

What is the cost and time it takes to develop connectivity infrastructure? The 8.8-km Rohtang tunnel was conceived in 1998; on October 15, 2017, the two ends of the tunnel finally met and is is expected to get operational by August 2019. The estimated cost of the project increased from ₹1,700 crore in 2010 to ₹4,000 crore in 2019. The Zozila tunnel is planned at a capital cost of ₹6,808.69 crore.

The 9.15-km long Bhupen Hazarika bridge across the Lohit river, constructed at a cost of ₹950 crore in six years, was inaugurated in May 2017. Also expected to be inaugurated this year is Bogibeel, the easternmost bridge across the Brahmaputra. Its cost has spiralled from ₹1,767 crore in 2002 to ₹6,000 crore.

Simplify processes

Considering the last-mile connectivity that the Chinese have achieved across our entire northern front, it is critical to reduce the time and cost of these projects.

For this, urgent process simplification is needed. Infusing high technology in executing the projects is imperative.

The budget has allocated ₹2,95,511.41 crore for defence, approximately 12.1 per cent of the total outlay. In terms of defence fxpenditure as percentage of Central expenditure, the allocation has dropped from 15.24 per cent in 2000-01 to 12.1 per cent. It is 1.58 per cent of the GDP, amongst the lowest in some time. India’s total military spending is fourth or fifth highest in the world, but in terms of per capita military expenditure it is comparatively low.

Despite the inadequacy of funds for modernisation, the underutilisation of capital allocations year after year is ironic. In an environment of competing demands on the budget, and the multiplicity and complexity of threats, prioritisation of defence modernisation requirements is absolutely critical.

At the current levels of import dependence, the modernisation plans are difficult to sustain. The force modernisation budget has the potential to contribute much more to the indigenous industrial base, R&D and job creation. Saving to exchequer will happen if we optimise on the revenue to employment ratio in the public sector and further leverage the potential of the private sector.

Defence Minister Nirmala Sitharaman made a good beginning by promulgating a revised policy for simplifying Make 2 — the 100 per cent industry-funded development projects for simple, indigenous requirements. Likewise, it is essential to implement many of the other policy provisions already articulated.

Three functions need focus: prioritising requirements, effective spending and justified supplementary allocation. This requires urgent reforms in structures for joint military planning; capital procurement with role distinction and accountability, optimised revenue expenditure and incentives for Make in India. In order to deal with the emerging threats, the allocation needs to be scaled up to over 2 per cent of GDP.

Additional allocation at the revised estimates stage is imperative, even if it comes with a caveat, subject to progress and prudence of expenditure.

The writer is Principal Adviser to CII and DG SIDM

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