DEFENCE NOTES

New Delhi, 20 March 2006

Defence Budget Trend

INADEQUATE YET GOING UNSPENT

By B.K. Mathur

The Defence Ministry’s budgetary proposals for 2006-07 have the same trend as in the last few years: Substantial increase in capital outlay but inadequate provision for running routine expenses.  The provision of Rs.77,000 crore for 2004-05 increased to Rs.83,000 crore for 2005-06 and now rose Rs.89,000 crore. But significantly, and concernedly, much of the provisions earmarked for capital outlay have remained unused and returned for years now.  Despite lack of planning by the Defence Ministry, the capital outlay for 2006-07 has been fixed at Rs.37,458 crore for military hardware, a 13 per cent jump from the current year’s allocation for capital outlay, of which Rs.13,000 crore has remained unspent.

It needs to be stressed that defence expenditure should be related to military effectiveness after taking into consideration security environment, current military strategies and, of course, availability of funds that require to be used judiciously. The Finance Minister, as often mentioned in this column, does not have any currency producing machine. Despite this, successive Finance Ministers post-1971 war against Pakistan have provided maximum possible for Defence. The Defence budgets since then have invariably ranged about 15 per cent of the Union Government’s expenditure.  Also, the Finance Ministers have invariably assured Parliament that shortage of funds would not come in the way of the nation’s security.

Despite such commitments and significant increase in Defence allocations year after year, the provision has not gone beyond three per cent of the GDP during the last decade and more, which has always been much below than that of our immediate neighbours, Pakistan and China.  In rupee terms the Defence budget provisions have undoubtedly risen annually.  There has been a steep rise of 82.5 per cent from Rs.35,620 crore in 1997-98 to Rs.65,000 crore in 2002-03.  But in real terms the hike during these years has not been more than seven per cent each year, which has been invariably grossly insufficient to update the military machines in accordance with the requirements for the present security environment.

It is another matter, as Chidambaram noted while presenting the Defence budget for 2006-07, that environment along the Indo-Pak border, especially the LoC, has improved.  But, the armed forces have always to remain in operational readiness to face any eventuality.  Moreover, the thumb rule for Defence budgeting is to provide for normal inflation as much as about 50 per cent more to meet the need for upgradation of military machines and their cost escalation in regard to the import of the equipment and weapon systems.  In this context, it is essential to understand the all expensive military hardware cannot be bought or produced indigenously overnight. 

It needs years of planning and coordination between the Defence Ministry and Service headquarters.  Lack of it is the bane of India’s security planning.  This has led to the great tragedy that an impression has been created for the last five or six years that the Defence Ministry fails to spend all the money allocated to it in the budget.  Even a former Defence Secretary remarked last year when about Rs.9,000 crore was returned unused as the allocation made for capital outlay or capital expenditure had to be returned unspent.  He told me: “The Ministry does not spend and returns the allocation unspent.  The same happened last year and during the current fiscal, that is 2005-06. 

This has been happening despite the fact that the Defence Minister, Pranab Mukherjee had stated in July 2004 that “most of the capital outlay will be utilized on the commitments of the defence acquisitions already made and the supplies are in the pipeline.”  In fact, Mukherjee had then indicated that he may have to ask for more on the capital outlay account, because some new and crucial purchases were needed to be made after clearing payments for the already finalized deals for expensive machines. Some payments may have been made, but significant amount of funds allotted for capital outlay remained unspent during the last two years. Nobody seems to be bothered why this has been happening. 

The main reason for this is the Defence Ministry’s or the Cabinet Committee for Security’s failure to finalise timely the prolonged negotiations for the purchase of expensive machines and weapon systems from abroad.  Obviously, there is undue delay in implementing big military modernization projects, despite the fact that defence preparedness suffers, while an impression goes round the world that India spends too much on defence year after year. No effort has obviously been made to set things right.  Remember, after the Kargil war the Chiefs of Staff Committee, headed by the, then, Army Chief, Gen. Ved Prakash Malik, had impressed up the Defence Ministry the need for a greater say of the armed forces in the procurement of weapon systems.

The Chiefs Committee had suggested that the Services representatives be also consulted when the purchases are placed before the Cabinet Committee on Security (CCS) for final approval.  But the system has by and large remained unchanged, with the Services’ role remaining restricted to participation in the Price Negotiations Committees (PNCs).  This is so even though the Defence Minister has for long been talking of integrating the Service Headquarters with the Ministry.  The bureaucracy-controlled system continues.  After the Finance Advisor (Defence Services) works out the financial liability, the Defence Ministry gets the final approval from the CCS.  This process invariably causes delays in the procurement of weapons and weapon systems.

The tragedy does not end there.  There have been instances when the Ministry has “reworked” deals already endorsed by the PNC before forwarding them to the CCS without the Service Headquarters even getting the whiff of the changes made in the deal.  One instance, among several others, can be quoted to prove the point.  APJ Abdul Kalam, as the Scientific Advisor in the Ministry headed the PNC on Global Positioning System (GPS) for Sukhoi-30 aircraft.  He had recommended the equipment produced by the French company, Sagem.  But the contract finally went to Sextant Avionique of French. The forces want to oversee arms purchases till the final CCS approval to ensure that the PNC heads are not blamed in the event of contracts coming under a cloud.

Both the Finance Minister and Defence Minister have promised that there will be no shortage of funds for Defence.  But the budgetary provisions continue to be returned unused.  The trend should change.  The whole procurement system needs to be streamlined.  A suggestion was made by the Parliamentary Committee for Defence that unutilized funds should remain with the Ministry and not added to the next year’s budget.  They should be put under separate head and spent on the projects for which they are meant.  It is a well-meaning proposal, which will not only change the budgeting pattern for Defence but also avoid delays in the implementation of projects for want of funds.---INFA

(Copyright, India News and Feature Alliance)

DEFENCE ISSUES

New Delhi, 13 March 2006

Defence Budget 2006

LACKS FUNDS FOR MARTYRS

By Col. P.K. Vasudeva, (Retd.)

The modernisation programmes that have been kick-started by the armed forces are set to continue, as the defence budget for 2006-07 has been hiked by 8.9 per cent (Rs. 7,300 crore) to Rs. 89,000, as against Rs. 81,700 crore in 2005-06 on expected lines. Finance Minister P Chidambram said while presenting the Budget that this hike is meant to cater to “normal growth in pay allowances, maintenance and for modernisation of the defence forces”. Now that the borders with Pakistan have been peaceful for two years,  the hike in the defence budget has been nominal.

Unlike in the previous year, the three Services did not spend all the money, but returned about Rs. 1,300 crore from the capital outlay.  The capital outlay for 2006-07 is Rs. 37,458 crore, up 13.25 per cent from the revised expenditure of last year, and constitutes a little over 42 per cent of the total defence budget.  The increase of Rs. 4,383 crore in arms acquisition funding implies that the Defence Ministry has a considerable sum in its hands to place orders for new equipment and also meet the commitments for orders placed by the previous and present governments. 

This will help the process of payments both for the aircraft carrier that India plans to build and the compliment of aircraft from Russia, submarines from France and advance jet trainers form Britain.  It will also help the Air Force call for international tenders to purchase 126 combat aircraft to shore up its depleting fighter squadron strength of MiG 21s and enable the army to purchase upgraded 155mm artillery guns. 

Despite its failures to meet the deadlines on the main battle tank and indigenous aero engines, the Defence Research and Development Organisation (DRDO) has been given a 7.48 per cent hike in allocation to Rs. 3,020.18 crore, from last year’s revised estimate of Rs. 2,809.96 crore. 

The allocation for the Army has been increased by 5.28 per cent to Rs. 33,205 crore from last year’s revised estimates of Rs. 31,539 crore, while that of the Indian Air Force  has been hiked by 7.88 per cent to Rs. 10,087.36 crore from Rs. 737.09 crore in 2005-06.  The Navy, the smallest of the three Services, has got a hike of 5.75 per cent, as the allocation been increased to Rs. 6,791 crore, compared to last year’s estimate of Rs. 6,422 crore. 

The revenue expenditure has been increased by 6 per cent to Rs. 51,542 crore, from Rs. 48,625 crore in 2005-06.  This is in line with the Army’s demand that the revenue outlay must not be downsized until the security situation stabilises to acceptable levels. 

While Prime Minister Manmohan Singh recently said that the country’s defence budget could be 3 per cent of GDP, the current budget is only 2.27 per cent of GDP, despite an 8.9 per cent hike.  India’s neighbours, China and Pakistan, allocate five to seven per cent of their GDP for their armed forces. 

The Government has also fulfilled the long-standing need of retired armed forces personnel below officer rank for better pension benefits.  About 12 lakh of these have benefited to the tune of Rs. 460 crore with effect from January 1, 2006. 

Having remained on the periphery of the Centre’s priorities in the 1990s, the defence sector came into the limelight after the 1999 Kargil conflict.  Moreover, nearly two years of full mobilisation on the border showed that the armed forces were under-prepared for a modern war.  The US-led military operations after 9/11 also contributed to increasing expenditure on military platforms and surveillance mechanisms. 

Despite the tranquil borders and a relatively stable situation in Jammu and Kashmir,  P. Chidambaram has made reasonably substantial allocations for the defence sector.  The revenue expenditure has been increased to 6 per cent because the Army will be averse to downsising until the security situation stabilises to its satisfaction.

On the capital expenditure side, the armed forces had made out a case for increasing the outlay from the current year’s Rs. 34,375 crore. Hence it has been increased by 13.25 per cent.  This is to meet the commitments for orders placed by the present and previous Governments and signed contracts for more equipment, primarily for the Army and the Navy. 

The funds allocated will help for purchasing more military hardware.  The Defence Ministry is in the process of purchasing a complement of surveillance planes for the Navy and a large number of tanks from Russia to replace its ageing Armoured Corps assets, besides air defence equipment.  The Navy is also planning to repeat an order for three warships from Russia.  It is keen on strengthening its nuclear force levels. 

Talks with Russia are highly confidential, but according to information, India is discussing the acquisition of long-range bomber planes and nuclear submarines.  However, there is no timeframe for completing the negotiations. In view of the complexity of such deals there was no requirement for Chidambaram to make allowance for these capital-intensive nuclear delivery systems. 

While India continues with high-end military purchases, industry is hoping to benefit from the spin-offs.  The Government has announced that foreign companies supplying equipment worth over Rs. 300 crore would have to source one-third of the value of the contract from the country.  The Defence Ministry is on the verge of finalizing this offset policy.  However, a question mark hangs over the policy because of pressure by foreign companies to modify some clauses to their advantage. 

While big military purchases and the huge expenditure on salaries and pensions for the armed forces are the two major components of the defence budget, the Army hoped for a little more generosity from the Finance Minister to adequately compensate soldiers who died in action.  The Defence Ministry had sent a proposal for higher compensation to its martyrs. This is unfortunate as the Finance Minister could not find funds for this noble cause. This is one of the reasons that the armed forces are not attracting sufficient number of quality youth of the country.

As a former Finance Minister, Pranab Mukherjee realises the constraints imposed by social sector commitments on the exchequer.  This is why he has refrained from  pressing for what the Prime Minister had assured: three per cent of the gross domestic product to the defence sector if the economy continued to grow at a healthy rate.  This long nurtured expectation of the armed forces, supported by strategic analysts, unfortunately has not materialised.---INFA

(Copyright, India News and Feature Alliance)

DEFENCE NOTES

New Delhi, 6 March 2006

India-US Nuke Deal

PLAN HARD SECOND STRIKE PROWESS

By B.K. Mathur

If President Bush succeeds in getting the nuclear deal he signed in New Delhi last week approved by the US Congress and the 38-nation Nuclear Suppliers Group, India would be viewed with the same prism as the nuclear weapon states which include, besides America, Russia, France, England and China. Militarily speaking, the agreement has provided India a win-win situation, as it allows New Delhi to have as many as eight of the 22 reactors out of the International Atomic Energy Agency (IAEA) inspection.  All eight are fast-breeder reactors (FBR).  Even those FBRs which would be set up before 2014 would be kept out of the IAEA purview.

What is more, the deal works out to India’s military advantage as it allows New Delhi to continue producing vast quantities of fissile material, something the five major nuclear powers have voluntarily stopped. Additionally, India would continue opening its research reactor CIRUS for the next five years.  It was supplied to India by Canada in 1954, with the Americans chipping in later by supplying heavy water to it. Significantly it would remain out of the IAEA safeguards because these measures did not exist when the reactor was supplied.  It is widely known that most of the plutonium stockpile and plutonium for India’s 1974 nuclear explosion came from CIRUS.

With the American assurance, Indian military reactors should be able to produce atleast 50 nuclear weapons every year. The deal also contains distinctive features such as an assurance from a consortium consisting of countries like Britain, France and Russia, besides the U.S.  This would ensure continuity of fuel supplies. This is proposed to be incorporated in another document.  New Delhi pressed for such a provision against the backdrop of its bitter experience India was denied fuel for the Tarapur reactor after the 1974 nuclear tests.  Even as the Bush Administration has accepted all the major conditions the Indian side, doubts still persist about the mighty and doughty Americans honouring their promises. They are not dependable, especially in military matters.

Despite doubts about Washington’s seriousness about conceding some concessions to India, President Bush’s statement in Islamabad is significant.  He stated in no uncertain manner that India and Pakistan are two different countries with “different needs and history”.  He made this observation while rejecting Islamabad’s request for extending the nuclear deal with Pakistan. What Bush obviously meant was that India has firmly promised not to make first use of nuclear weapons, while Musharraf has threatened time and again that he will use nuclear weapons if and when required. India’s nuclear weapons are only intended to be deterrent in view of the fact that its neighbours on two sides, Pakistan and China, are nuclear weapon states.

Undoubtedly, India has repeatedly stressed that its declared policy is no first use of nuclear weapons. But the country’s second strike capability should not only be well protected but also “overwhelmingly devastating as the Chief of Naval Staff, Admiral Arun Prakash had observed not long ago at a seminar at the Institute of Defence Studies and Analyses (IDSA). This was considered necessary by him since India’s potential rival has in the past threatened first use of nuclear weapons. India’s deterrence must lie in adversary’s mind.  The enemy needs to understand that the consequences of using nuclear weapons will be horrible and devastating.

Moreover, there is need to understand the perception of a nuclear war. The use of an atom bomb or even small weapons with nuclear warheads would invariably be an action by a losing force towards the end of a conventional battle between the three elements of the armed forces, the Army, Navy and the Air Force.  Obviously, therefore, the preparedness of India’s land force is of paramount importance in a conventional battle, even if Islamabad threatens first use of nuclear weapons. But even with the threat of first use, Pakistan, or for that matter any nuclear power, would use nuclear weapons at the end of the defeat of its land forces.

Strategically, the role of the Indians Army is crucial in a conventional war where the enemy is likely to use nuclear weapons.  Therefore, India’s land force must have an inventory of a large number of small nuclear-head weapons for use in the event of the enemy making the first use of its N-arsenal. It is now for the defence planners to decide how best the Army needs to be equipped with nuclear warheads, organized and trained for a possible war.  In this context, the Army Headquarters’ recent decision to raise a new regional Command is welcome. It stretches from southern Punjab to mid-Rajasthan.

Importantly, the Army and its command and control requires to be so organized as to be prepared to take on the enemy’s nuclear arsenal before it is finally used, despite India’s no-first-use policy.  The field force is to be reorganized with emphasis on mechanized formations, with the infantry possessing for its forward movement small weapons with nuclear warheads.  In other words, the deployment of armour, followed by mechanized infantry with the support of artillery from behind or sideways and the air force from above, all having nuclear-head weaponry, would require courage for the enemy to make first use of a nuclear bomb.

The reorganization of the armed forces in preparation for a hard second strike capability in the event of a nuclear war should not be taken as India’s efforts to get into an arms race.  Soon after the signing of the India-US nuclear agreement, Defence Minister Pranab Mukherjee was quick to clarify that India has no intention of joining an arms race but procure arms according to the country’s needs. Reacting to a question if the India-US nuke deal would trigger an arms race in the sub-Continent, Mukherjee said: “We have no territorial ambitions….”  Agreed, and the world knows about India’s policy.  But the country has per force to plan a massive modernization of its military hardware. 

In this context, the defence planners have to be careful in buying military machines, forgetting the history of American dealings.  Within hours of signing the India-US nuclear deal, America has offered explicit guarantees of reliable future military supplies in a clear indication. But the nuclear agreement between the two countries has something more than the offer of energy security and fair trade.  Washington knows that India is emerging as a big arms market. It is making promises galore.  It has already offered F-16 and F-16 multi-role combat aircraft.  There is need to consider all aspects of the offer and not get tempted by sweet talks and commitments.  There are other options for fighter aircraft.---INFA.

 (Copyright, India News and Feature Alliance)

DEFENCE NOTES

New Delhi, 20 February 2006

A Dangerous Move

Muslim Headcount in armed forces

by B.K. Mathur

An angry retired Major-General participates in a protest march against the Government move to collect data on the number of Muslims in India’s armed forces.  Another former two Star General, now in politics, reacts sharply: there is too much meddling in the forces – and the military ethos.  A third one, a retired KCO (King’s Commissioned Officer) of the British Indian Army yells in typical military style: “dismiss” (scrap) the committee which has asked for the Muslim headcount in the armed forces.  I have commanded “general regiments” during my service and never heard of such a census.”

These reactions and many more of senior retired and serving Officers of the armed forces on the move came to light a few days ago reflect the mood in the three defence Services.  The controversial Muslim-specific survey was ordered by the Government in March last year despite objection by the Army on the ground that it would send a wrong signal to the forces which are traditionally secular and apolitical. The objection was overruled and the data is being collected by a seven-member Committee, headed by Justice Rajender Sachar (Retd.). He has been quoted as stating: “The military is not different from any other Central Government organisatoin.”  (About this another time).

Even the present Chief of the Army Staff, General J.J. Singh is dead against the Government move.  He firmly believes that it would be improper to collect such a data, leading to a wrong message to the troops.  The General met the Defence Minister, Pranab Mukherjee recently and conveyed to him in no uncertain terms that the Army is apolitical in character and that the people from all communities and regions work together, live together and fight together, irrespective of caste, creed and religion.  The Chiefs of the other two Services, of the Air Force and the Navy, are also of the same view.  It is another matter that they have passed on to the Committee some information which was readily available, their’s being smaller Services. 

The Defence Minister too agrees with the strong views of the Service Chiefs.  But the survey continues to be on, as the Government considers it an effort to promote “minority welfare” for studying the social, economic and education status of the Muslim community in India.  Or, is it the appeasement of Muslims for electoral gains?  Wonder why the Sachar Committee has also sought information relating to military operations since independence, including the Hyderabad action and the Kargil operation.  Obviously, the Committee wants to know if a large number of Muslim troops had deserted during these two operations.

This kind of an exercise to appease the Muslims sends a very wrong signal to the armed forces.  No desertion has taken place in the Army on religious grounds.  First of all, a distinction needs to be made between a “revolt” and “desertion”.  In military terminology troops “desert” or run away from a battlefield under enemy’s pressure.  Such a situation arose only in 1962, when some Indian troops ran away from the front. Even the commander of that Division in NEFA reported sick.  Indian troops had revolted only in 1857.  British historians described it as “military uprising”.  Freedom fighters call it  the “first war of independence.”  The Sachar Committee seems to have based its query on the contents of a book “Khaki and the Ethnic Violence in India” by one Omar Khalid.

Not many would remember that after the partition of India, the Army Headquarters, then called GHQ (General Headquarters) had offered to the Muslim soldiers an option to go to Pakistan. Muslims (in General Regiments and all-Muslim Regiments, like the 18 and 19 anti-aircraft gun Regiments then based in North West Frontier Province (NWFP) and earlier deployed in Burma and Singapore).  Those who opted for the Pakistan Army were allowed to go.  18 anti-aircraft Regiment fully moved out to Pakistan. The machines and the Hindu Officer of the 19 Regiment were kept back. The rest went to Pakistan. Importantly, those who stayed on in the Indian Army remained loyal to the force, and the nation.  Remember Brigadier Usman, who sacrificed his life fighting for India in Kashmir in 1948.  He was posthumously awarded Param Vir Chakra.

After the Kashmir operation, first after independence, several Muslim personnel  sacrificed their lives fighting for the nation. To name a few, JCO Ayub Mohammad was given Param Vir Chakra for gallantry in the 1971 war against Pakistan. The armour officer, who single-handedly played hell with several enemy tanks, was later rewarded with the Lok Sabha membership.  One can go on and on remembering names of Muslim personnel who laid down their lives in the service of the nation.  Former Chief of Air Staff, Air Chief Marshal Latif was instrumental in preparing fighter pilots and in planning air attacks. At present the senior most Officer in the Indian Army is Lt-Gen. Z.U. Shah, brother of film star Naseeruddin Shah.  He is commanding the Dimapur-based 3 Corps.

In fact, India’s armed forces have lately been shocked by stupid proposals time and again – equally horrifying and damaging for the military ethos if not more than the headcount of Muslims.  Only a few months ago, a proposal was mooted to change the Army’s regimental system and to seek reservations for Scheduled Castes and Scheduled Tribes.  The demands such as this, headcount of Muslims and creation of more regiments for the SCs and STs would do the country’s armed forces great harm – not only for the might of the force and the globally known valour of its jawans but also to its regimental history and traditions.  The soldier fights for the izzat of his regiment – and, of course, the service of the nation.

The demand for reservations or creation of new regiments has been lately made by the Chairman of the National Commission for Scheduled Castes and former Governor Suraj Bhan.  Earlier, L.K. Advani as the Deputy Prime Minister had promised to raise a Gujarat Regiment during his election campaign in Gandhinagar for the Lok Sabha poll in 2004.  Demands for new regiments have also been made from Himachal Pradesh, Arunachal Pradesh and Karnataka.  In this connection, please understand that the British rulers did not raise Indian regiments on caste or community basis.  They picked up soldiers from different regions and named their regiments accordingly, like Rajputana Rifles, Sikh Regiment, Dogra Regiment, Gorkha Regiment etc.

Defence policy-makers and politicians have need to visit military units and spend some time there to see for themselves how they function and train.  Personally they practise their own religion, for which  temples, masjids and Churches are available in most old regiments. But when in uniform, and on the battlefield their “dharma” is only one: service to the nation. There is total brotherhood, no Hindu, Muslim, Sikh, Isai. And at the time of recruitment, promotions, deployment and training, merit is the only consideration.  There is no question of caste, community or religion. This is the military ethos of free India.  Please do not try to meddle with it. If you do it, it will be at your own peril.  ---INFA.

(Copyright, India News and Feature Alliance)