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March 14, 2001


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Admiral J G Nadkarni (retd)

The Defence Budget: Lost opportunities

Defence is not a particularly endearing subject for India's parliamentarians. Many years ago, when defence budgets used to be actually discussed in the House, one could rarely find more than a dozen members present and listening to the invariably pedestrian quality of the debate.

Even the few erstwhile members of armed forces who sat in the Lok or Rajya Sabha failed to bring any form of erudition to their contributions. In fact, it has been somewhat of a relief that the Parliament, usually pressed for time due to one fracas or another, has stopped discussing the defence budget altogether for the past many years.

Up to last year, the finance minister used to include two or three sentences about defence funding in his Budget speech. After acknowledging the contribution made by the defence forces, he would give the usual assurance by intoning "that where defence of the country is concerned money would not be a consideration."

This year he dropped from his two hour long speech even that small nod to the armed forces of the country. An allotment of Rs 65,000 odd crores, nearly 25 per cent of the total non-plan expenditure, went almost unnoticed.

If the past record is anything to go by, it is unlikely that any further mention of defence appropriation will be made during the parliamentary debate on the Budget. A golden opportunity to discuss, question, modify or prune this enormous sum of money will be lost.

In most Western democracies legislators take their responsibilities seriously. Defence budgets are discussed threadbare before money is sanctioned. Previous sanctions are scrutinised and monitored. Senior officers from the defence services are called to give evidence, questioned relentlessly and sometimes hauled on the mat for tardiness in performance.

India is most probably the only democratic country where such vast sums are approved without even a debate. It is left to a few columnists to say something about what has long become the holiest of cows.

Discussing the Indian defence budget is like playing a game of golf at midnight, without the use of lights. No one can see the fairway, leave alone the green. Either due to sheer laziness or our obsession with secrecy, no figures or details are ever published. No one, except the few mandarins in South Block, know where the money is coming from nor where it is going. Is any amount earmarked for the purchase of the "Gorshkov" in the naval budget, or Su 30s in the air force budget? How much of the money will each service get for modernisation? Who knows and who cares?

The defence budget this year has seen an increase of about 12 per cent over the revised appropriations for last year. Taking 10 per cent out for inflation it will add very little for modernisation, the usual problem with all our budgets over the past many years. The amount earmarked to give the country a semblance of defence is about 2.5 per cent of the GDP.

Defence experts bemoan the fact that over the past many years the percentage has steadily dwindled from nearly 4 per cent in the mid-eighties to the present 2.5 percent. Even the defence minister has been aiming at 3 per cent in many of his speeches. Why 3 per cent and not, say, 5 or 10 per cent? No one really knows. "That is what most countries have" experts will tell you. Nonsense. Both Brazil and Japan spend about 1 per cent on their defence. Pakistan spends 7 percent.

Indeed, deciding how much money should be spent on defence first, and then building your defences accordingly is putting the cart before the horse. Every sensible country will always decide what minimal defence it requires and then allocate money accordingly.

Those who have genuinely studied India's defence appropriations these many years, have three main areas of criticism. First, we spend too much on defence. Second, there is need for transparency. And finally the budget is lopsided, with maintenance claiming too much of the money.

Establishment officials and defence experts who defend India's defence expenditure do so primarily with the help of statistics. At 2.5 per cent of GDP the sum allocated is, according to them, modest. On the other hand, in absolute terms, Rs 65,000 crores, by any reckoning is an enormous amount, especially in an impoverished country like India. It is still ten times the amount allocated for education and welfare. Four times the money required to improve our infrastructure, roads and ports.

It is, of course, practically impossible to say whether the amount earmarked for defence is too little or too much without the aid of data and details of expenditure. The Indian defence budget must possibly be the most opaque document in the world. Those with contacts in the South Block manage to get some figures, but for your average taxpaying citizen it is next to impossible to find out where the money is going. If he tries to be more inquisitive than normal, he may find himself arrested under the draconian Official Secrets Act.

India's defence establishment must try to stop the keyhole management of defence money. The tax payer has a right to know where his money is going and whether it is being spent wisely or foolishly. The present attitude of "You leave that to us, we know more about these things" must change.

By far the biggest defect in the defence appropriations is that most of the money is, as usual, going for the maintenance of the vast defence establishment. Today nearly 90 per cent of the army's budget and 60 per cent of the air force and naval budgets go towards maintaining, paying and feeding the existing vast establishments. With increases due to inflation and successive pay commissions this cost is steadily mounting, leaving very little for modernisation and replacement of outdated equipment. Little effort has been made in the past to overcome or even address this basic flaw in our defence expenditure.

The Arun Singh committee, one of the four post-Kargil task forces appointed, dealt only with personnel and command structure of the armed forces. Instead of cutting the flab, all their recommendations, if implemented, will only add more top weight to an already top heavy armed force.

What is urgently required is the setting up of an all powerful committee to go into the defence expenditure of the country. It should hold public hearings on defence spending and should have only one term of reference. To suggest means and methods of cutting the flab ensuring that defence money gives this country what it really needs, a lean and mean fighting machine.

Admiral J G Nadkarni (retd)

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