NEWS
Presenting the interim Budget to Parliament on February 16, India’s Finance Minister Pranab Mukherjee allocated Rs 1,41,703 crore ($28.35 billion) for defence, marking a 34 per cent increase over the last fiscal. Among other factors, the hike in the defence budget is intended to finance fast-track procurement of defence equipment. Mukherjee said the increased allocation was due to the prevailing security environment which had deteriorated considerably. We are going through tough times. The Mumbai terror attacks have given an entirely new dimension to cross-border terrorism, the Finance Minister said.

VIEWS
Does the whopping 34 per cent increase in defence budget indicate the Indian government’s response to the wakeup call to plug gaping holes in the national security apparatus and infrastructure? Even after making room for an average annual inflation of 5 per cent, the hike amounts to 29 per cent—substantial by any standards. However, while the government’s intentions may be good, implementation would ultimately decide the score. First, at this point in time, it is only an interim budget and it is hoped that post general elections in the coming months the new government will honour the commitment. Second, the devil lies in the detail. It is common knowledge that a major chunk of the new budget will go towards the new salaries and pensions of armed forces personnel, including payment of the remaining 60 per cent of the cumulative arrears since January 2006—this itself amounts to Rs 36,103 crore increase in allocation over last year.

Good news is, of the Rs 1,41,703 crore defence outlay over last year’s Rs 1,05,600 crore, the capital component also stands at a healthy Rs 54,824 crore ($11 billion approximately in today’s exchange rate). While ostensibly, this has been to finance fast-track procurement of defence equipment, in actual effect there is no such thing as fast-track procurement of defence equipment in the Indian scenario, thanks to the cumbersome, time-wasting acquisition procedures, bureaucratic red-tape and the apprehensions plaguing decision makers over getting involved in controversies arising out of a multitude of vested and conflicting interests. This and the finance ministry’s machinations have ensured that year after year large amounts of unutilised capital funds are surrendered by the Defence Ministry. This year, Rs 7,000 crore was surrendered due to non-utilisation in capital expenditure. The amount surrendered over the last five years has accumulated to well over Rs 20,000 crore.

In a classic knee-jerk reaction, the Defence Acquisition Council, chaired by Defence Minister A.K. Antony and attended by the three service chiefs, among others, cleared the proposal to procure equipment such as off-shore patrol vessels, fast-attack craft and radars for both coast guard and navy in a step towards bolstering coastal security in the wake of 26/11 Mumbai terror attacks. This is, however, just the tip of the iceberg. To create even a fool-proof 24X7 border surveillance system encompassing maritime, land and airspace boundaries, huge investment would be needed to plug the existing gaping holes. Then there is the case of giving a new fillip to the modernisation plans of the services which had been languishing for a long time. Take the case of the IAF alone, wherein its combat squadrons’ strength has been recklessly allowed to shrink by as much as a quarter of its original strength. The other services have also suffered from the same malady due to indifferent procurement policies and procedures.