The armed forces received a major jolt as the New Year began with the announcement that Rs 10,000 crore have been slashed from the projected budget for 2012-13. The finance ministry conveyed its decision of imposing around 5% cut in the Rs 1.93 lakh crore defence budget this year, arguing that fiscal adjustment was necessary since the economic situation was grim.
Earlier, defence minister AK Antony, during a rare parliamentary discussion on India's defence preparedness in May 2012, had said that he would seek a hike in the defence outlay in the 2012-13 budget due to "new ground realities" and the "changing security scenario" in the backdrop of the China-Pakistan nexus.
This move will lead to a major slowdown in ongoing acquisition projects, which include aircraft, helicopters, howitzers and missiles. It also makes it clear that the already delayed $20-billion deal to acquire 126 medium multi-role combat aircraft (MMRCA) will not be inked anytime before March 31. The Indian Air Force (IAF) had been assured of an additional Rs 10,000 crore to cater to the first instalment of the MMRCA project - under which final commercial negotiations are underway for French Rafale fighters - if inked within this fiscal.
But now the armed forces' hopes have been dashed. As it is they get way less than what they demand every year. The armed forces, for instance, had sought an outlay of Rs 2,39,123 crore this fiscal, which would have amounted to 2.35% of the projected GDP for 2012-13. But they got only Rs 1,93,408 crore (0.9% of the GDP). They have always been demanding at least 3% of GDP, which is essential to keep the forces fit for war.
Revenue expenditure -day-to-day expenses and salaries - in the defence budget continues to outstrip the capital outlay for new weapons, sensors and platforms. They were Rs 1,13,829 crore and Rs 79,579 crore, respectively, this fiscal. While the navy and IAF are better placed, the real worry is the 'critical operational hollowness' in the 1.13 million-strong army. The army had projected a requirement of more than Rs 10 lakh crore for the 12th five-year plan period to acquire new capabilities and plug operational gaps in artillery, aviation, air defence, night-fighting, anti-tank guided missiles and specialised tank and rifle ammunition.
India's economic growth and access to military technology, especially after its rapprochement with the US, have raised hopes of a military revival. Against this newfound optimism stands the reality that India hasn't been able to alter its military-strategic position despite being one of the world's largest importers of advanced conventional weapons for three decades. It's believed that civil-military relations in India are focused heavily on one side of the problem - ensuring civilian control over the armed forces while neglecting the other - how to build and field an effective military force. This imbalance in relations has made military reforms suffer from a lack of political guidance, disunity of purpose and effort and material and intellectual corruption.
China, on the other hand, is rapidly modernising its armed forces. According to SIPRI, a research institute, China's annual defence spending rose from more than $30 billion in 2000 to almost $120 billion in 2010. The total military spending in 2012, based on the latest announcement from Beijing, is about $160 billion. America still spends four-and-a-half times as much on defence, but going by the present trends, China's defence spending could overtake America's after 2035.
PK Vasudeva is a defence analyst The views expressed by the author are personal