A Perspective on the Defense Budget

By Lt Gen P R Shankar (R)

Our growth and role as a power of consequence and our attempts to achieve strategic independence is predicated on how the defense establishment grows.

Published In the Financial Express @ https://www.financialexpress.com/defence/a-perspective-on-the-defense-budget/2974379/

It is my firm belief that the Indian Armed Forces are ready and strong enough to guard the territorial integrity and sovereignty of the nation. However, the question is – are the Indian Armed Forces ready to anchor India’s rise as a global power?   The answer is very clearly not yet. The difference between the two states is technology or lack of it. The day our Armed Forces are enabled with the military technologies of this century, we will be one of the great powers on this earth.

Any commentary on the defense budget for the year 2023-24 must be based on this matrix. Very clearly, the increase in the overall outlay of the defense budget and consequentially, the increases in the outlays to the various sub heads fully meets the objective of being able to guard the territorial integrity and sovereignty of the nation. No questions on that. Full marks to the government on this score. However, the critical question is – does the defense budget meets the aspirations of a rising India to be a global power. In my opinion it falls woefully short. It falls short, not due to the absence of adequate outlay or allocation for defense but in its lack of vision and silence of informed thought.

There is no doubt that India is a rising power. I have written about that extensively in two of my articles –  Geo-economics of India’s rise  and India – The Emerging Third Pole . I am convinced that India has attained a critical ‘unstoppable’ mass. When our prime minister talks of India being a ‘Vishwaguru’, I am proud that he can do so since the people of India empower him to do so. India’s rise is currently anchored by its rise in its geo-economics, diplomacy, productivity, and most other elements which make up its power structure. If there is one element which weighs down India in its rise at present, it is its defense sector and armed forces. Let me explain further. In the last century, USA was producing military aircraft by the hour, tanks by the day and warships by the week or even less to beat the Germans and Japanese. Our current defense budget caters for the Indian Armed Forces to acquire weapon systems like tanks, guns, aircraft, and ships which were the essentials of the last century.It does not even start to cater for acquisition of the military technologies of this century with which our potential adversaries are equipping themselves with. These technologies, provide the force multiplication needed to cross a threshold value of power. Without such an empowered force matrix, India will not be able to project power or carry out defense diplomacy to back its aspirational role in global affairs. These technologies are the ‘differentials’ between being a ‘power of reckoning’ or not. We are staring at a bottom line where we our valiant soldiers are facing technologically advanced adversaries on an uneven playing field.    

It is very heartening that the CAPEX, across the board has been increased from 2.7% to 3.3% of the GDP in the budget. Some analysts point out that eventually this ratio is likely to shoot up to 4.5% within the year. It will do immensely good to the gross national power of India. However, the current defense outlay is barely 2% of the GDP. If the economy grows as envisaged, even within this year, the defense expenditure as a percentage of the GDP is likely to dip further! Moreover, the defense allocation as a percentage of the total budget outlay has also decreased!  We have a situation where our national investment and growth is in one direction and the defense outlays in another! It raises a major question. Are the defense forces part of the nation or apart from them? From a very fundamental and conceptual point of view, national growth must spur growth of its defense and vice versa. The nation and its defense forces must grow together. There must be a ‘seep through’ effect from one to the other. That must shine through the national budget, which is the traditional Indian instrument of policy and governance. Very evidently, this thought process seems to be missing, unless I am missing a point. I would like to be educated (with logic and reason and not dogma which seems to be free flowing these days). 

There is no doubt in anyone’s mind that ‘defense’ is a driver of any nation’s economy. Scientific innovations and technological breakthroughs spurred by defense requirements contribute immensely to the development cycle of nations. Hence there must be an umbilical connect between civil and military sectors. These days, this connect goes by the neo modern Chinese term ‘Civil Military Fusion’. Civil Military Fusion has propelled nations to greatness whether it is erstwhile Imperialist nations like Japan or Great Britain and in current times USA, Russia, and more recently China. The current defense budget has no vestige of Civil Military fusion whatsoever. In fact, the opposite seems to be the case. Let me highlight it further. Very importantly, if military technologies of this century are not injected into the Armed Forces, we will remain short on our aspirations. Critically, most of these technologies are dual purpose in nature and have the great quality of being able to ‘double drive’ the national economy as also meet defense requirements. While many other policy issues were announced on the floor of the Parliament during the budget speech, the issue of leveraging and exploiting dual use technologies was conspicuous by its very absence. Further, two defense corridors were launched with great fanfare some time back. There was a lot of ‘to and fro’ on these corridors. They were to be the ‘double engines’ of national growth . Once the initial heat and dust of these corridors has settled down, it is emerging that they are merely languishing. In the case of the Southern Defense corridor, the languishment is palpable. 

It seems ‘Defense’ has once again become the ‘holy cow’ it was not meant to be. The budget speech gave a complete miss (even to the mere mention) of the defense budget /outlay.  In fact, the word ‘defense’ did not even appear in all the ticker tapes of TV channels broadcasting the budget live. Am I missing a trick?  It has become a practice in the recent past not to even outline the basic proposals as related to defense on the floor of the house during the budget presentations. The policy thrust for development of  India’s defense and security is beset by increasing opacity and lack of debate on this critical aspect of national importance. It does not do a vibrant democracy proud. The lack of providing an opportunity for debate by the ruling class and the lack of insistence on debate by the opposition class on defense related issues indicates either political ignorance or indifference. Both are deeply disturbing and detrimental to national interests.

After the declassification of the budget, the public discourse in the Armed Forces fraternity indicates that this pill is being accepted as one which must be swallowed in mute resignation. In fact, some analysts have eulogized the budget for the minor mercies showered on its defense establishment for the fear of even that being denied. The intellectual and perceptual gaps in the politico-military hierarchy could not have been starker. The lack of unitary politico military thought could cost the nation dearly.  The fact that it is costing Russia dearly, after being involved in a sapping conflict for nearly a year, should give us a clear indication of the danger of leaving the military out of the ‘loop’ and using armchair defense experts and bureaucrats in their place. Afterall, wise people learn from other’s mistakes.  Are we destined to be fools forever?   

One might say that I have gone over the top. Allow me to elucidate further with some examples. Increasing defense exports, to offset defense expenditure is a stated policy of the government. Yet there is no organized road map or structure to realize laid down goals. In the absence of such a plan, backed by an organization, an important stream of revenue is completely missing in the national budget. What is more distressing is that the opportunity for defense exports is now. There is a Russia sized hole in the international defense market. Who is filling it? Predictably China! What are we doing? Twiddling thumbs – even though we can produce or service Russian equipment the most. Further, one expects the national budget to lay the tone for incentivizing defense innovation and enhancing defense atmanirbharta. That was clearly missing in the budget presentation. It was also announced with some fanfare (some time back) that defense research will go beyond the brick wall of DRDO to spur academia and private research. The public silence on this is deafening to say the least. It appears that a well-coordinated hijack has taken place to ensure that the DRDO bastion is not breached. It is understandable that defense expenditure is a white elephant proposition. It will remain so until the vibrancy of market financing mechanisms (including venture capitalism) and the potential of startups are not tapped. Till new ideas are floated and some elementary risk is taken, the anemic IDEX will remain the weak harbinger of startups in defense. Something more robust and meaningful is needed at national level. By the time a startup goes through the hoops of the myriad procedures, it is time for a ‘shutdown’. Many of these issues will find their right feet if we can embark of some degree of sensible civil military fusion. However, our discourse on civil military fusion is limited in concept to fast tracking defense acquisition. All this is aided and abetted by a bureaucracy completely at odds with reality. The budget is just a reflection of the ills that plague the defense establishment.        

Last but not the least, I would like to make another point. Even if the finance minister did make some additional allotment to financially meet our defense necessities, I am confident that the entire staff of the MOD finance will not be able to advise or guide the MOD and Services on how to spend it effectively. In fact, very often they do the opposite due to a misplaced sense of probity, morality and vision of what’s good for the nation. Simply put, India lacks the structure to modernize its military. In effect, India will lack the ability to rise as a great power despite having the potential of being able to do so.

My remarks on the defense budget are not a punt on the finance ministry alone. Much of this responsibility lies with the men in uniform also. The military leaders in Delhi must leave the fighting to the front-line troops and start looking over the horizon to prepare the armed forces and the nation for the future. They bear the responsibility of putting across the bottom lines to the political hierarchy, without fear or favor, instead of parroting what is politically correct (ostensibly).  It is time that the leadership – military and political sit down together and hammer things out. Our growth and role as a power of consequence and our attempts to achieve strategic independence is predicated on how the defense establishment grows. The defense budget is only a reflection of the problems within. 

I do understand that not many will heed this bleat. However, it is time heed the clarion call of the salami slicer who has recovered from Covid. One can prevent one Yangtse. How can we prevent more which are coming our way relentlessly if we are not prepared?           

Also see the video @ https://gunnersshot.com/2023/02/05/indias-defence-budget-a-discussion-in-jaipur-dialogues/