At a time when global military expenditure has crossed the one trillion-dollar mark, the debate over affordability of defence has become even more intense.
Toning military muscle is paramount given the contemporary security scenario, but no less critical is improving the lot of the underprivileged.
As India prepares to make military purchases worth over $ 10 billion in the next five years, the need to strike a balance between increasing defence outlays and powering economic growth in other sectors was underlined at the three-day international seminar on defence finance and economics, which began on Monday.
Inaugurating the seminar, External Affairs Minister Pranab Mukherjee said, "Even a fraction of money the world spends on defence can change things for millions. But the irony is that defence preparedness is necessary for the safety of these very people and others too." He highlighted the need to balance security concerns with development.
At 35.4 per cent, India’s expenditure on procurement as percentage of military expenditure is the highest in the world followed by China (33.3 per cent) and USA (19.95 per cent).
According to a SIPRI (Stockholm International Peace Research Institute) report, India and China continue to be among the world’s top arms importers. During a session on optimal resource allocation in defence, Air Chief Marshal SP Tyagi said economic development would remain a distant dream in the absence of a secure environment, for which investments in military capabilities were required. India ranks among the world's fifteen highest spenders on defence.
Mukherjee conceived the seminar, organised by ministry of defence (finance), when he was the defence defence minister. A first of its kind, the event is being attended by 80 foreign delegates from 28 countries including experts from SIPRI, the Pentagon, Russian military specialists, the UK department of defence and the RAND Corporation.
Teeth-to-tail ratio, the guns versus butter dilemma, prohibitive cost of new weapon systems and making domestic industry more competitive were some of the issues discussed on Monday.
Vinod Mishra, secretary, defence (finance), hoped that the seminar would help bridge the gap between think tanks and practitioners and also demystify some of the complex concepts in defence finance.
Mishra said, “The question of competing demands of the social sector inevitably presents itself in any discourse on affordability of defence. This puts a great strain on the credibility and utility of defence economics as a tool of decision making.”
He said that a reasonably secure environment was the pre-condition for sustained economic development and growth depending on the geo-strategic realities and threat perception of individual nations.
Finance Minister P Chidambaram called upon the defence public sector to improve competitiveness by reducing costs and enhancing productivity.
He emphasised that the argument that the government must support loss-making undertakings or inefficient ordinance factories because of their strategic importance was not tenable in an increasingly globalised world with other efficient alternatives.
Over the next two days, experts will discuss a rich gamut of defence issues such as strategies and economics, different dimensions of acquisitions, research and development, project management concerns, manpower, audit and accountability in defence expenditure.