Despite rapid strides being made in the neighbourhood to upset the military balance in the region, the Union Budget 2016-17 offers too little to match this, finds Shankar Kumar
China is giving an extra push to its strategic railway connectivity plan with Arunachal Pradesh, Nepal and Bhutan. And with their feasibility study already complete, the country’s Qinghai-Tibet rail line will reach these places by 2020. China’s five of six airports on the Tibetan plateau have also become operational. To step up its military modernisation programme, the country has hiked its budgetary outlay by 7-8 percent to touch a staggering $155 billion for 2016. Despite this, the Narendra Modi Government while presenting third budget since 2014, allocated around US $50 billion (nearly Rs 3.41 lakh crore) for the country’s defence in 2016-17. Of course, in comparison to last year, defence budget has been hiked by over 11 percent this year, yet the capital expenditure is merely $11.68 billion (Rs 78,586 crore). Of this capital outlay, only $1.78 billion (Rs 12000 crore) has been earmarked for new projects and new acquisitions.
In view of emerging challenges at India’s Eastern and Northern borders with China and Western borders with Pakistan, this is being seen as “peanut fund” hugely inadequate to modernise the country’s 1.3 million active personnel. The country has not been able to execute major defence deals for several years; negotiations for off the shelf purchase of 36 Rafale aircraft from France is stuck on the issue of price. The process for the acquisition of self-propelled howitzers guns is yet to be complete. Worse, lack of funds is making Indian army struggle to raise mountain division to checkmate China on Eastern and Northern fronts of the country.
In July 2013, the Manmohan Singh Government had approved for raising the XVII mountain strike corps with 90,274 additional troops to take care of the needs of the country’s security. To be established in over eight years period (by 2020-2021), the Army is also supposed to equip its mountain strike corps with the cutting-edge technology, apart from laying infrastructure and capability development plan along Northern and Eastern borders with China. Then in its objective to increase deterrence level vis-à-vis China’s People Liberation Army, the XVII mountain strike corps is also expected to have rapid action force which can take its counter-offensive move into Tibet Autonomous Region (TAR) in the event of any aggression from its Northern neighbour. In this regard, the mountain strike force, with its headquarters to be set up in Panagarh in West Bengal, has to be armed with two high altitude infantry divisions, air defence, artillery and armoured brigades. The cost of raising the whole mountain division was fixed at US $9.60 billion (Rs 64,678 crore). But the Army’s inability to get this dedicated fund in one-go is hampering its effort to raise mountain strike force as per the already decided roadmap. Worse, this division is being raised by using ammunition from War Wastage Reserve (WWR), a collection of equipment held in reserve in pre-positioned storage to be used in the times of war.
This is a worrisome scenario. Last year, the Comptroller and Auditor General (CAG) maintained in no uncertain terms that if India were to go to war today, 90 percent of its ammunition would not last even for 10 days. Tabled in Parliament on May 9, 2015, the CAG report said that the ammunition roadmap drawn by the Army in 2012 for building up the stock to 50 percent by March 2015 and 100 percent by 2019 has remained far from being realized. Then fund constraints are also compelling armed forces to carry on with INSAS Rifle which is beset with problems like jamming, magazine cracking and going into automatic mode after three rounds of fire. Army’s air defence is outdated as well. For deployment of troops at forbidden border posts, some as high as 23,000 feet from sea level, the Army has to depend on its more than 40-year-old Cheetah-Chetak helicopters. Similarly, armed forces are yet to be adequately equipped with ‘third generation’ night vision devices. Pakistan has got a range of third generation devices from the US under the ‘War on Terror’ agreement; PLA’s entire tank and mechanized divisions are also fitted with night vision devices. But back home the Army’s demand for quality night vision devices is stuck in bureaucratic files.
According to a report, 80 percent of the country’s T-72 to T-90 tanks are yet to be fitted with night vision devices. Only a few weeks ago, Army chief Dalbir Singh Suhag assured soldiers that the purchase of 1.86 lakh bulletproof jackets would be finalised soon. Since 2009, purchase of bullet proof vests is caught in several technical logjams. In 2012, a fresh proposal was issued after changing the qualitative requirements for the vests. Four years have elapsed ever since and yet soldiers facing Pakistan sponsored terrorists and intruders’ gun at the Line of Control (LoC) in Jammu and Kashmir are yet to see new bullet proof vests.
Even Indian Air Force has been left in the cold. Against a sanctioned strength of 42 combat squadrons, IAF currently has only 33 squadrons. Three squadrons of MiG-21 and MiG-27 single engine aircraft will be progressively phased out by 2018. As per IAF’s 2020 vision document, in case of a two-front war with Pakistan and China, India will require 750-strong fleet of aircraft. As such, even if purchase of 36 Rafale aircraft is finalised soon, the total strength of IAF squadrons would be 35 only. But the question is: with budgetary allocation for capital expenditure earmarked at $1.78 billion (Rs 12000 crore), will the Modi Government be able to execute Rafale deal? Defence Minister Manohar Parrikar says: “adequate funds are available for new contracts, including for the purchase of 36 Rafale fighter jets.”
Defence expert Deba R Mohanty of Indicia Research and Advisory, a Delhi-based think tank, supports the 2016-17 defence budget. “There is an attempt to rationalise allocations this year,” he said, adding that it may appear “inadequate” against perceived demands but “in real sense it has indicated that the Government is against old and irrelevant proposals.” According to his argument, big ticket items could save money through joint or domestic productions. Indeed, US’ BAE has now agreed to produce M777 howitzer guns under ‘Make in India’ initiative. Purchase of 145 M777 howitzer guns of worth $700 million from the US was pending for years. Russia has also agreed to manufacture 226 Kamov helicopters for Indian Army and Air Force under ‘Make in India’ initiative; Israel, Japan, South Korea and France have shown interest in joint production of defence equipments within the country. The budgetary allocation indicates in clear terms that rather than increasing the import bill, the Government is inclined for indigenisation of defence products. While $5.19 billion (Rs 35,000 crore) worth of defence equipment was imported in 2014-15, the import bill in 2016-17 was $5.5 billion (Rs 34,000 crore). But in the process of reducing import bills, the defence budget is getting slicker year after year, which perhaps goes against IAF’s 2020 vision, calling for an incremental increase to 4 percent of the GDP.
Even the Parliamentary Standing Committee on Defence recommended allocation to be 3 percent of the GDP. In contrast, this year’s defence budget, even if pensions are included, does not go beyond 2.26 percent of the GDP which is much below the defence services’ formulations that take into account Long Term Integrated Perspective Plan (it prioritises procurement plan over the next 15-16 years).
But experts say that one should look into broader national security domain. Allocations for military related investments in atomic energy, space, police and paramilitary forces could account for about 27 percent of the Government expenditure. However, proof of the pudding lies in the eating. Only time will tell whether by reducing the capital outlay, the Government has tried to cut unnecessary flab from its defence spending, or put in risk the country’s security system.