Defence Note

New Delhi, 15 July 2014

2014-15Defence Allocations

DEFICIENT IN THREAT PERCEPTION

By Col (Dr) PK Vasudeva (Retd)

Prime Minister Modi has given an impetus to defence whereby budgetary allocations would increase by 12.5 per cent in 2014-15, compared to the previous year as highlighted by Union Finance Minister Arun Jaitley in the Union Budget.

Notably, the allotments were raised to Rs.2.29 lakh crore ($38.35 billion), Rs 50 billion more than the previous UPA Government in the interim budget earlier this year. Whereby, capital budget have gone up from Rs 89,588 crores to Rs 94,588 crores while the revenue budget remains at Rs 1,34,412 crore.  The army will get Rs 20,665 crore for modernisation; navy Rs 22,312 crore and air force Rs 31,818 crore for new equipment.

This is not all. Importantly, the budget also underscored the Prime Minister’s intention to open the domestic weapons industry to foreign investment to help rebuild the military and narrow the gap with China. Wherein, the composite cap of foreign exchange has been raised from 26 to 49 per cent with full Indian management and control through the FIPB route.

This entails giving the domestic manufactures a greater role in producing modern equipment with foreign help as the country’s capacities are still at a nascent stage. Presently, companies controlled by foreign Governments and its private sector cater to India’s requirements at a considerable outflow of foreign exchange.

Alongside, there is a massive 60 per cent increase in funding to the Defence Research & Development Organisation (DRDO), from Rs 5,985 crore to Rs 9,298 crore, the largest jump in DRDO’s history. This takes R&D in to Rs 15,283 crore, almost 7 per cent of the Rs 2,29,000 crore-defence budget, as pleaded by the Organisation.

Another beneficiary is a new project for building a “defence rail network” in the border areas under which meter gauge lines would be upgraded to broad gauge at a cost of Rs 1,000 crore to facilitate quick movement of heavy equipment from cantonments located in the interiors to border areas.

Pertinently, China has built massive infrastructure along the Line of Actual Control (LAC) which allows it to swiftly mobilize troops and equipment thereby outnumbering Indian forces by 3:1 ratio there.

To ensure speedy readdressal, Rs 30,000 crore has been earmarked towards the artillery modernization plan for 145 ultra-light howitzers, 1,580 towed guns, 814 mounted guns, 100 tracked self-propelled guns, 180-wheeled self-propelled guns etc. Given that the country has not inducted a single 155mm artillery gun since the Bofors scandal of the mid-1980s.  

Clearly, the howitzer project, among others, is meant to equip the new XVII Mountain Strike Corps (90,000 troops) being raised to gain “quick reaction force capabilities.” against China. 

Moreover, capital allocation for the Ordnance Factory Board (OFB), used for modernising the Defence Ministry’s network of 41 factories which manufacture arms, ammunition and equipment for the military has been doubled, from Rs 530 crore to Rs  1,207 crore.

Also on the anvil are critical arms and equipment urgently required by the Defence Forces: Almost $20 billion to acquire 126 medium multi-role combat (MMRCA) aircrafts. The French Rafael jet was selected but the project is yet to be inked. The IAF is down to just 34 fighter squadrons

Notably, over Rs 50,000-crore is needed for acquisition of six new-generation stealth submarines, with both land-attack missile capabilities and air-independent propulsion (AIP). Alas, Project-75 was approved in November 2007 but global tender are yet to be issued. The Navy is down to just 9 operational diesel-electric submarines at present, with another four stuck in long refits. 

Furthermore, over Rs 3,000-crore is required for acquisition of 197 new light-utility helicopters for the IAF and Army. True, the project was scrapped in December 2007 but 440 such helicopters are needed to replace the virtually obsolete Cheetah/Chetak fleets. 

Importantly, Ex Servicemen have reason to be happy with their demand for ‘one rank one pension’ (OROP) being met. Namely, Rs 1000 crore has been earmarked to implement this policy which would address “pension disparities”, wherein ex-servicemen would be granted equal pension to pensioners of the same rank and equal length of service, irrespective of their date of retirement. Further, any future enhancement in pension would be automatically passed on to old pensioners.

However, some apprehensions have arisen over information permeating out of South Block for finalising implementation orders.  It is learnt that the CGDA and the PCDA are trying to give a different definition to OROP against the backdrop of the bureaucracy being seen as antagonistic towards veterans. Servicemen have their fingers crossed that babudom does not to hijack the grant of OROP.

Another beneficiary of this year’s Budget is the tri-service “joint staff’ headquarters which has been allocated Rs 1,029 crore up from Rs 829 crore. Not a few defence analysts wonder whether this would be followed by appointment of a tri-service (CDS) Chief of the Defence Staff/Permanent Chairman of the Chiefs of Staff Committee as recommended by the Kargil and Naresh Chandra Committees respectively.

In sum, notwithstanding the boost in defence spending, India's military budget is still less than a third of China's $145 billion expenditure last year as estimated by a Pentagon report to the US Congress.

As it stands, the present defence expenditure of 1.78 per cent of the GDP is just not sufficient for modernisation of acutely deficient defence forces when the threat perception from our adversaries is looming large. This should be raised to at least 3 per cent of the GDP as recommended by the Parliamentary Committee on Defence. Mr Jaitley will you heed? ----- INFA

(Copyright, India News and Feature Alliance)