In real terms, the defence budget may have remained static or even declined Admiral (Retd) Arun Prakash.

AS EXPECTED, the defence budget for FY 2008-09 crossed the landmark figure of Rs 1 lakh crore after the FM factored in an escalation of about 10 per cent over last year’s estimates. However, this milestone loses much of its sheen when viewed pragmatically in the light of some hard realities.

The first significant point is the defence budget’s percentage to GDP. For the first time since 1962, it has fallen below 2 per cent. Post-Independence, mindset of India’s political leadership was that expenditure on defence was a necessary evil, and since there was no threat to the nation, it needed to be curbed as much as possible. The figure, therefore, hovered around 1.8 per cent of GDP for the first decade or so, and fell to 1.69 per cent in 1962.

Consequent to India’s humiliating defeat in the brief Sino-Indian war of 1962, the defence expenditure climbed to an average of 3.05 per cent GDP for the next 25 years. Thereafter, it slid gradually to 2.31 per cent at the turn of the century. Those present at the 2005 Combined Commanders Conference will recall Prime Minister Manmohan Singh’s remark that if the economy continued on its current trajectory, he envisaged no impediment to defence allocation hitting the 3 per cent GDP mark. Of course, neither a general election nor a pay commission hovered on the horizon then. Nevertheless, we need to be extremely wary of letting our guard down yet again.