Modi govt@4: May the forces get a bigger budget

As the Narendra Modi government completes four years, the record of the Ministry of Defence (MoD) can at best be termed mixed. The MoD, easily the most complicated and cumbersome of the portfolios, has in parts suffered because it has seen four defence ministers in four years.

It would, however, be unfair to blame the Modi government alone for the mess in which the defence sector finds itself in mid-2018. A combination of prolonged neglect and unstructured acquisition by the previous governments meant that the armed forces have been struggling to keep its arsenal up-to-date. Critical shortages were never made up in time, leading up to a huge backlog difficult to be made up in shorter time frame of four years.

Therefore, the formation of Defence Planning Committee (DPC) under the chairmanship of National Security Adviser (NSA) Ajit Doval in April 2018 has not come a day too soon. The DPC is much more than a body to just improve defence procurements or revitalise defence diplomacy. Its formation is part of a larger exercise ordered by the Prime Minister's Office (PMO) to review the existing structures that give inputs on vital national security issues and provide advice to the Cabinet Committee on Security (CCS), the highest decision-making body that finally approves crucial steps to protect India's national interests. Four verticals — Policy and strategy, Planning and capability development, Defence diplomacy and Defence manufacturing—have been included in the DPC.

Of the four verticals entrusted to the DPC, the section on defence procurements has attracted the most attention in the public discussion so far because of recent revelations that the majority of India's military arsenal is either outdated or is getting there quickly. As a consequence, the DPC is expected to first concentrate on repairing the dysfunctional procurement process and align future acquisitions with the quantum of funds that are likely to be available in the next few years. It is here that the inclusion of Secretary Expenditure from the Ministry of Finance in the DPC is welcome. One aspect that is often ignored in the management of the MoD expenditure is the fact that early in its tenure, the Modi government decided to fulfil a 45-year old promise of granting One Rank One Pension to retired soldiers, further adding to the ballooning salary and pension bill. From a share of about 45 per cent of the MoD budget in 2014-15, today the pay and pension bill in 2019 has risen to a whopping 56 per cent while the allocation for acquiring new weaponry (capital expenditure) has come down from 21 per cent in 2014-15 to a mere 18 per cent in the current budget. This high manpower cost is obviously unacceptable and the government will have to find ways to curtail this expenditure.

One way of doing it is to right size the forces, since pension is an obligation that the nation has to fulfil for supporting its former soldiers. In the government's internal discussions the limits to the fund available to the defence forces has been flagged time and again. The MoD budget is already 33 per cent of the capital expenditure of the government and 11.58 per cent of the overall expenditure, it has been pointed out. To expect more funds under the current circumstances is therefore impractical, military planners have concluded. The trick would, therefore, be to maximise the utilisation of available funds and reprioritise the areas of acquisition and modernisation.

Even as the DPC hunkers down, there is a lot of restructuring and revamp happening within the MoD. The new draft Defence Production Policy for instance. It may appear overly ambitious in its scope and vision. A closer scrutiny, however, reveals that a deliberate roadmap is being evolved to make India one of the top five defence and aerospace hubs in the world that can create and support jobs for two to three million people by 2025.

Even as policies and guidelines get finalised to revitalise the Indian defence sector, many new initiatives and systems have been introduced to utilise current fund allotment to its full extent. So, in 2017-18 — for the first time since the Kargil conflict in 1999 — the Indian Army's ammunition stock, inventory of spares and maintenance of existing critical equipment is up to date, thanks to a combination of emergency procurement and revamped management system.

Meanwhile, in late 2016, the Army signed 19 major contracts worth Rs 11,000 crore to replenish about 10 different types of ammunition. Deliveries in three of the bigger contracts have been completed and 13 others are on the verge of being fulfilled by end of 2018. Similarly, the Indian Air Force and Indian Navy too bought ammunition and spares worth over Rs 10,000 crores to make up for years of neglect and indecision.

Additionally, over 75 contracts to buy and stock crucial spares for different equipment worth over Rs 15,000 crore (to be spent over the next four years) have been signed by the Army in 2017-18. These two measures alone have ensured that ammunition stock is up-to-date. Deliberate decentralisation of financial powers and emphasis on sourcing more equipment and stores from indigenous sources, thanks to the decision made by former defence minister Manohar Parrikar and continued to be supported by the incumbent minister Nirmala Sitharaman, has resulted in improved efficiency.

From here on, all measures to build on the long-term plan to equip the military for a 30-day war, will continue apace. Although the Army Vice-Chief has flagged the meagre allotment in the coming financial year which may impede or slow down the 30i (30 days of intense war) plan, the MoD is confident that wherever required, money will be made available, as it has been done for buying the 36 Rafale aircraft, the M-777 light howitzers, Apache and Chinook helicopters among several other required weapons systems by the three armed forces. Decisions on purchasing these crucial platforms were pending for periods ranging from five to seven years. Thus, the MoD has spent these four years in removing the cobwebs and untying the Gordian knot so to speak and is now poised to strengthen systems and processes for faster decision-making.

While the utilisation of revenue budget has been exemplary over the past three-four years, the military is still faced with huge shortfall in its funds for capital or new acquisitions, as highlighted by the Parliamentary Standing Committee on Defence in its latest report. The government will have to find ways to augment the necessary budget if it wants to ensure that the military remains in top shape and ready for the twin challenges it faces from Pakistan and China.

FLYING HIGH

• A roadmap is being evolved to make India one of the top five defence and aerospace hubs in the world.
   
• In 2016, the Army signed 19 big contracts worth Rs 11,000 crore to replenish 10 different types of ammunition.
   
• In 2017-18, for the first time since Kargil conflict, stock of ammunition, inventory of spares, etc is up to date