Budget set to boost defence spending

The government is expected to sharply raise defence spending in its Union Budget next week and pile pressure on nuclear capable foe Pakistan, locked with it in a military standoff.

Defence analysts expect the government to release funds to the military to buy powerful new weapons such as airborne surveillance systems, fighter planes, submarines and a second aircraft carrier.

"The military will be fully funded, given the situation," said Bharat Karnad, a security affairs analyst at the Centre for Policy Research, an independent New Delhi-based think-tank.

The frenetic modernisation of the world's fourth largest military after years of neglect in the 1990s follows a worsening of relations with Pakistan, which has triggered fears around the world of a fourth war between the nuclear-armed countries.

Most experts expect Finance Minister Yashwant Sinha to boost defence spending by at least 15 per cent in the budget for the year to March 2003, building on last year's 13.8 per cent rise.

But the Economic Times newspaper said this week the increase in defence expenditure for the coming year could be anywhere between a staggering 25 and 30 per cent above last year's allocation of Rs 620 billion, or $12.75 billion.

About a million troops have been massed on both sides of the India-Pakistan border for nearly two months, in a crisis sparked by an assault on the Indian Parliament blamed on Pakistan-based militants active in the disputed region of Kashmir.

New Delhi, which has scaled back diplomatic ties with Pakistan, has rejected its calls for talks to end the dangerous border standoff, saying troops will pull back only if Islamabad halts what it calls cross-border terrorism in Kashmir.

"Quite clearly, we must raise the costs for Pakistan for the proxy war in Jammu and Kashmir. It must be across the full range of diplomatic, military and economic options open to us," a former Indian envoy to Pakistan told Reuters.

Pakistan, which denies direct involvement in the 12-year-revolt in Kashmir, has said the cost of the huge deployment on the border was manageable, and has vowed to ensure full funding for the defence of the nation.

The neighbours are, however, home to one of the world's largest concentrations of people living in harsh poverty and can ill-afford an arms race.

NUCLEAR ARSENAL, BIGGER ROLE

India's defence expenditure has hovered at around 2.3 per cent of the gross domestic product in the 1990s but analysts said the government aimed to take the defence allocation to three per cent, a significant jump.

New Delhi, which conducted nuclear tests in the summer of 1998, is working on an ambitious nuclear arsenal based on missiles, ships and aircraft.

While figures are not stated separately for the nuclear weaponisation programme, experts say building from scratch a nuclear deterrent comprising warheads, missiles, command and control systems, could take upwards of $500 million a year.

K Subrahmanyam, one of India's foremost security experts, said defence allocation was rising also because the country was equipping itself for a bigger role in international security after the attacks of September 11.

"This year's rise, and it will probably be sharp, should not be seen according to the old calculations vis-a-vis our two neighbours," he said referring to Pakistan, and China to the north with which it fought a brief war in 1962.

He said there were clear signs that the navy was being bolstered to play a bigger role in the Indian Ocean, and this will likely show up in higher central funding.

India and Russia said this month they had reached an agreement on a refurbished aircraft carrier which will be the Indian navy's second. A third, smaller air defence ship is being designed at home to join the fleet in eight years.

India will also lease two Russian TU-22M supersonic bombers and is in talks for purchase of submarines, officials said.

For the first time in decades, New Delhi was also set to open talks with the United States to buy radars after Washington lifted sanctions imposed over the Indian nuclear tests.

SLOW DEALS, SCANDALS

But experts also pointed out that while the military was flush with money, it had been slow to wrap up many of the deals on its shopping list.

Arms acquisitions in the civilian-controlled defence ministry is a long and complicated procedure shrouded in secrecy, and several past deals have been tainted by charges of kickbacks.

Defence Minister George Fernandes said this week there had been no progress in long-running negotiations with Britain's BAE Systems Plc to buy 66 jet trainer planes the air force urgently needs to trim its high rate of accidents.

"There are people who are not prepared to take decisions...there are far too many people who are getting involved in it," Fernandes said without elaborating.

Fernandes himself had to resign briefly last year after two reporters posing as arms dealers secretly filmed politicians, army officers and bureaucrats accepting money in return for pushing through an imaginary arms deal. He denied any wrongdoing. Reuters

YOU MAY ALSO WANT TO READ:
The Rediff Budget Special
Run-Up To The Budget
Money