There is a fundamental need for the government to transform its approach on the questions of national security and the resulting requirements of budgetary support for the country’s defence

Presenting the Union Budget in the Parliament on March 16, Finance Minister Pranab Mukherjee announced that he was allocating a sum of over Rs. 1,93,407 crore ($39 billion approximately) for defence spending during the financial year 2012-13. The coming year’s allocation shows an increase of about 17 per cent over the last year’s Rs. 1,64,000 crore ($36 billion) at the revised estimate (RE) stage. Percentage wise, the Indian Army’s share works out to a hefty 50 per cent ( Rs. 96,942 crore), followed by the Indian Air Force (IAF) at roughly 25 per cent ( Rs. 47,558 crore) and the Indian Navy at 19 per cent ( Rs. 36,413 crore). The remaining six per cent or so has been earmarked for the Defence Research and Development Organisation (DRDO) and its research establishments. In terms of percentages, while the Army has remained at the previous year’s figure, it is the Indian Navy which has gained a hefty four per cent increase up from last year’s share of 15 per cent; which has happened at the expense of the IAF which has slid down close to five per cent from the previous year’s 30 per cent.

On the revenue side, the breakdown of expenditure stands at Rs. 78,114 crore for the manpower heavy Army while it remains much lower for other services with the Navy at Rs. 12,548 crore, Air Force at Rs. 17,705 crore and the DRDO at Rs. 5,996 crore, respectively.

On the capital side too, the IAF has not done as well as the previous year having been allotted only Rs. 29,853 crore compared to the last year when it received Rs. 30,699 crore. Once again, it is the Navy which has jumped in capital allocations from previous year’s Rs. 13,008 crore to a hefty Rs. 23,865 crore for 2012-13. The Army’s figures are closer to last year’s allocations at Rs. 18,828 crore.

The total capital outlay amounting to Rs. 79,579 crore also includes a sum of Rs. 2,393 crore which is earmarked for agencies outside the three wings of the armed forces. On the face of it, at Rs. 77,186 crore, this year’s allocations for capital acquisitions show a respectable 15 per cent increase over the previous few years where the trend was normally restricted to an annual 10 per cent increase. But the fact that most of the armed forces’ capital acquisitions are through direct import and paid for in US dollars, the very respectable increase in capital allocations takes a nosedive when one factors in the fact that in the last one year Indian rupee has depreciated by more than 20 per cent against the dollar. Therefore, this ostensibly respectable increase in capital expenditure does nothing except to cater, if at all, to the heavily depleted rupee and the annual inflationary pressures—both global and domestic. It may also be noteworthy that every year, the Ministry of Defence (MoD) is literally forced to surrender the unspent money and there is no guarantee that the trend wouldn’t be repeated in the coming year too.

Therefore, in absolute terms there may be little reason to cheer as far as acquisition of the major hardware for the armed forces is concerned. It may be noted that these allocations do not permit quicker modernisation of the services so desperately wanting to match the feverish pace at which India’s two neighbourhood adversaries, namely, China and Pakistan are arming themselves. The IAF, for instance, even though given maximum portion of the ‘capital pie’ will be able to rapidly absorb the allocated amounts on the already ‘ongoing’ programmes. But it would be left with little money to initiate other long-pending and urgent new projects.