Defence Notes  

New Delhi, 13 July 2009

Defence Spending

NO CHEERS FOR EX-SERVICE OFFICERS

Aimed at fast-tracking procurement of defence equipment, Finance Minister Pranab Mukherjee confirmed the increase in the country’s defence outlay by 34 per cent during 2009-10 to Rs.1,41,703 crore up from Rs 1,14,600 allocated during 2008-09 (revised estimates). The budget also allocates Rs.4,757 crore for the Defence Research and Development Organisation (DRDO) and Rs. 832 crore for defence ordnance factories.

Noticeably, the three Services will see Rs.43,811 crore or nearly 54 per cent going towards pay and allowances, as a result of the Sixth Pay Commission award. While the Army will spend a whopping Rs.36,081 crore or 64 per cent under this head, the Navy and Air Force have set aside 34 per cent each-- Rs.2,850 crore and Rs.4,880 crore repectively. From the budget estimate in 2008-09, the near-Rs 15,600 crore pensions went up to Rs 20,232 crore in the revised estimates, and have been allocated Rs 21,790 crore in the current budget.

Thus, it is not wrongly observed that over 55 per cent of the defence outlay is being spent on pay, allowances and pensions alone and only 46 per cent is left for the modernisation of the Forces and training purpose, which is grossly inadequate in view of the  neighbourhood becoming increasingly hostile.  

Of the allocation for the fiscal that began April 1, plan expenditure for defence has been pegged at Rs.86,879 crore against Rs.73,600 crore for the financial year just ended March 31. This includes Rs.54,824 crore for capital expenditure as against Rs.41,000 crore in the revised estimates for 2008-09.

The Army’s allocation is even larger than the Rs.54,824 crore that has been set aside for capital expenditure for all three Services. However, in the case of capital expenditure, the bulk, almost Rs.20,000 crore, has been set aside for the Air Force, against Rs.17,767.95 crore for the Army and Rs.11,873.73 crore for the Navy.

Less than a year ago, in October 2008, the Comptroller and Auditor General (CAG) report had slammed the Government on its poor naval fleet. It said that no more than 48 per cent of India’s submarine fleet was available for waging a war with some of the submarines having already outlived their lives. Thus, we should be thankful to Russia for finalizing the Gorshkov (aircraft carrier) deal for about $2.2 billion, which should give the much-needed boost to the Navy.

Importantly, it would be a worthwhile exercise to see how much of this will actually be spent. Shockingly, the Armed Forces returned Rs.7,000 crore of the Rs.48,007 allocated for capital expenditure for 2008-09. As always, the Army and the Air Force were responsible for the biggest quantum of money allocated towards equipment but it was returned unspent because they could not purchase the much-needed light utility helicopters and 155mm artillery guns. The Army was allocated Rs 8,345 crore for equipment, but spent only Rs 6,268 crore, whereas the Air Force allocated Rs 6,290 crore could spend nearly Rs 1,000 crore less at Rs 5,151 crore.

This only goes to show the apathy in the Armed Forces about utilizing the amount, even if its meager for the acquiring the latest defence equipment. The shortage of arms, equipment, aircrafts and guns will only affect the fighting capability of the Forces which is a very serious concern. Thus, top priority should be given to streamline the defence procurement system by the Raksha Mantralaya to ensure that the funds allocated are properly utilized and don’t go waste. This lethargy on the part of the Ministry of Defence can let down the country in case of a war in the future.  

Besides, the defence spending is still at about two per cent of the GDP, compared to our neighbours—China’s seven per cent and Pakistan’s five per cent. The defence expenditure should at least be a minimum three per cent of the GDP to keep the Armed Forces well-equipped and god forbid fit for war.

On another front, Mukherjee said enhanced pensions had been approved and that this would annually cost the Government Rs.2,100 crore. The decision, he further added “will benefit more than 12 lakh jawans (soldiers) and JCOs. Certain benefits being extended to war wounded and other disabled pensioners are also being liberalized.” The minister also said the committee headed by the Cabinet Secretary on One-Rank-One- Pension (OROP) had submitted its report and its recommendations have been accepted.

However, the skillfully-crafted statement by Mukherjee on the Defence Forces’ demand for OROP, has created a wholly erroneous impression i.e. that the UPA Government has finally granted it. Nothing could be farther from the truth. In fact, available information indicates that the issue of OROP has not been even remotely addressed.

What Mukherjee said in Parliament was: Further: “On the basis of these recommendations, the Government has decided to substantially improve the pension of pre-1.1. 2006 defence pensioners below officer rank (PBOR) and bring pre-10.10.1997 pensioners on par with post 10.10.1997 pensioners. Both these decisions will be implemented from 1st July 2009, resulting in enhanced pension for more than 12 lakh jawans and Junior Commissioned Officers (JCOs).”

By bringing the pre-1996 pensioners at par with the post-1996 pensioners, the Finance Minister has only rectified a 13-year-old anomaly, which should have been done long ago. Revised pensions announced after the VI CPC had created three distinct classes of pensioners: pre-1996 retirees, 01 Jan 1996 to 31 Dec 2005 retirees and post 01 Jan 2006 retirees. As a result, similar personnel in each class received widely differing pensions.

Equity and natural justice demanded that these artificial distinctions should have been removed whenever pensions were revised; post V and VI CPCs. In a litigation relating to equity between pre and post 1996 defence pensioners, even the Supreme Court had ruled in September last that such distinctions violated Article 14 of the Constitution. In fact, one may argue that Mukherjee’s reported magnanimity is guided more by the Apex court judgment than any serious concern for the Defence Pensioners.

Importantly, the division between pre and post 2006 pensioners remains unaddressed. It needs reminding that the demand of the Defence Forces and Defence Pensioners for OROP was, in fact, only for removal of this division. Such indifference of the Centre for the Defence Forces and veterans is all the more galling, when viewed against the President’s address, assuring early resolution of OROP, to both Houses of Parliament.

And, what is one to make of repeated statements of the Ministry of Defence and its Minister Antony that the gap in pensions between the old and new pensioners will be substantially reduced and pensionary benefits of officers and jawans brought as close to OROP as possible? Sadly, for the ex-service officers there is nothing to cheer about. –INFA

 (Copyright, India News and Feature Alliance)