ELECTIONS '98
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Defence budget needs immediate attention

With the contours of the new dispensation at the Centre emerging slowly, finalising the proposed defence outlay for the next financial year will be among the few tricky things the government will have to get down to immediately.

Another conclusion is that irrespective of the combine which assumes the reins of power following the constitution of the 12^th Lok Sabha next week, it is going to be under some stress to go in for a higher defence outlay for 1998-99 that had become virtually static at less than 2.5 per cent of the gross domestic product for the past four years.

While fixing the proposed defence outlay would be part and parcel of the budgetary exercise for fiscal 1998-99, it will amply demonstrate the balancing skills of the new government vis-a-vis various other sectors which are bound to vie with each other for enhanced allocation of funds.

The shape of things to come is evident from the statements of various political outfits with regard to defence during the run-up to the election. While the Congress and United Front did not make any direct reference to defence expenditure, the BJP expressed displeasure of sorts at the declining defence budget as a percentage of GDP in the past few years.

The annual increases in the defence budget in the past few years have not resulted in any real hike and have barely neutralised the impact of inflation.

While defence expenditure has been hovering between 14.5 per cent to 15 per cent of the central government's expenditure since 1994-95, it has been declining as a percentage of the GDP ever since, and is understood to be around 2.2 per cent of GDP during the current year (1997-98).

In 1986-87, defence expenditure was 17.55 per cent of the central government's expenditure and accounted for 3.58 per cent of the GDP during that year.

The apparently "substantial" 28.14 per cent hike in the defence outlay for the current financial year was misleading as a better part of it went towards meeting the obligations of the Fifth Pay Commission and the remaining, as usual, barely took care of the prevailing rate of inflation.

According to defence analysts, changes around the world and in India's neighbourhood continue to throw up new security challenges while persisting with or modifying old ones. Defence planners, thus, are faced with the daunting task of reviewing programmes in the light of the changes at the global level as well as in the context of specific threats in the region.

Any defence budget is expected to reflect the endeavour of the government of the day to balance the minimum maintenance requirements of the defence forces, and the need to modernise them within the constraints of the nation's economy.

The budget estimates for defence for the current financial year were pegged at Rs 356.2 billion, which included Rs 36.2 billion, for the Fifth Pay Commission award.

In its election manifesto, the BJP noted that the nation faced grave challenges to its integrity and security as never before. The internal and external security environment had deteriorated sharply in the last decade.

It also noted that since 1991, the country's defence budget had been declining in real terms and from 3.4 per cent of the GDP in 1989-90 had gone down to a mere 2.2 per cent during the current year.

The manifesto also pointed out that there was a mistaken view that there was a conflict between national security and economic development. "But these two go hand in hand, there cannot be economic development without commensurate security preparation and the reverse, too, is equally true."

The United Front said the defence forces needed immediate attention to further improve their quality and morale. The Congress also assured immediate action to arrest and reverse the decline in the quality of and morale in the defence forces.

While the BJP promised to set up a national commission to study and analyse the trends in defence technologies and appropriately advise the government on the development and induction of advanced weapons, the United Front had said it would establish an empowered national commission as a statutory body to formulate essential reforms in the defence apparatus and monitor their implementation in a time-bound schedule.

Parliament's standing committee on defence in the dissolved 11^th Lok Sabha had observed that defence preparedness had not received the priority it deserved. It said the capital acquisitions had lagged far behind targets visualised in modernisation and re-equipment plans of the armed forces.

The committee also noted that "uncertain and inadequate flow of funds during the last decade ..... betrayed a sense of complacency which the country could not afford."

UNI

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