The defence budget of Rs. 2,03,672 crore ($37 billion) for 2013-14 is a hike of 5.3 per cent from last year’s budget estimate of Rs. 1,93,407.29 crore ($35.8 billion). The Army has been allocated a total of Rs. 17,879.28 crore as capital budget as compared to Rs. 15,750.30 crore in the revenue estimates of last year, an increase of about Rs. 2,129 crore.

The Union Budget 2013-14 presented in the Parliament on February 28, 2013, by Finance Minister P. Chidambaram, has increased the defence budget to Rs. 2,03,672 crore ($37 billion) for 2013-14, marking a hike of 5.3 per cent of last year’s budget estimate (BE) of Rs. 1,93,407.29 crore ($35.8 billion), which does not even cater to the inflation. If the revised estimates are taken into account then the increase amounts to 14 per cent over and above last year’s revised allocation. The unspoken and hidden aspect is that the capital budget quite often remains underutilised to some extent or is cut by the Finance Ministry halfway into the year. For instance, in December 2012, Finance Minister P. Chidambaram had cut the defence capital outlay by Rs. 10,000 crore. This year’s budget announcement was accompanied by the Finance Minister’s statement promising more funds. This is the usual rhetorical statement which every Finance Minister makes after declaring the allocations for the defence budget. The budgetary allocation this year marks a reduction in GDP ratio from 1.9 last year to 1.79 per cent of GDP this year.

The fact that it is an uninspiring defence budget is obvious because the defence services are involved in a major modernisation process with several acquisitions in the pipeline besides upgradation of infrastructure in the northeast along the border with China. The modernisation of all three services is way behind schedule, adversely affecting the operational capabilities of the three services. The five per cent increase in the overall defence budget, apart from being meagre, when seen in the light of the lacklustre performance of the Defence Ministry in ensuring timely procurements of requisite weapons and other systems, has raised the concern of all strategic and military analysts about national security. We know that the buck stops at the level of the fighting formations of the Army, the naval fleets and fighter squadrons of the Indian Air Force (IAF) and if these are not equipped with modern weaponry and voids continue year after year, then we are looking at disastrous consequences in the making. We have seen the gradual degradation of the operational capabilities of the armed forces over the years. The Indian Army is the worst affected in this regard because no new weapon or other systems have been introduced for the past two decades or so barring a few conventional missile systems. What is not usually appreciated is that voids in the Army cannot be made up quickly due to the magnitude of our requirements and lack of military capability is also likely to weaken our national resolve to safeguard our national interests because either politically or diplomatically, we will not be able to act firmly if we are militarily weak.

It can be broadly concluded from the figures (see Table) that the share of the defence budget in the GDP has decreased from 1.9 last year to 1.79 this year. Moreover, what is quite evident is the fact the revenue expenditure has been decreased and this will undoubtedly impact the transportation (fuel) courses abroad, and overall training of the three services. It seems that the negligible growth of the defence budget has been influenced primarily because of the poor economic state of the country.

Service Wise Share in the Total Budget

The Army with an approximate budget of Rs. 99,707.8 crore accounts for 48.96 per cent of the latest defence budget, the Air Force with Rs. 57,502.9 crore accounts for 28.23 per cent, the Navy with Rs. 36,343.5 crore accounts for 17.84 per cent while the Defence Research and Development Organisation (DRDO) with Rs. 10,610.2 crore accounts for 5.21 per cent and ordnance factories with minus Rs. 508.7 crore amounts to minus 0.24 per cent. It is obvious that the Air Force has increased its share in the total defence allocation (from 24.9 per cent to 28.2 per cent). The Navy’s share has decreased the most (by 1.4 per cent), whereas the Army and DRDO’s shares have declined by 1.3 and 0.3 per cent, respectively. This time, the Air Force is the only service which has seen an increase in both the revenue expenditure and capital expenditure. For the Army, there is a fall in the capital budget of Rs. 1,294.35 crore when the budget estimate figure of previous year is compared to this year’s allocation.

Impact on Modernisation

The capital budget shows an increase of nine per cent as compared to 15 per cent last year. Capital budget is mainly meant for new procurements for modernisation of the armed forces. Currently, all three services are in the process of undertaking an extensive modernisation drive and therefore the meagre amount of increase in the capital budget implies another dry year for most procurement.

Army

The Army has been allocated a total of Rs. 17,879.28 crore as capital budget compared to Rs. 15,750.30 crore in the revenue estimates (RE) of last year, an increase of about Rs. 2,129 crore. Under the heads: aircraft and aero engines, heavy- and medium-vehicles, and other equipment which constitute the heads under which most capital procurement is done, the Army has been allocated only Rs. 13,311 crore (approximately $2.7 billion) and considering the high inflationary trends and unfavourable exchange rate regime, and the fact that more than 60 per cent would go for paying committed liabilities, it would leave Rs. 5,324.4 crore for new procurements which is meagre considering that even the Eleventh Five Year Plan (2008 to 2012) procurements have not fructified. Added to this is the incredibly slow and complicated procurement procedure in which any agency of the government (there are more than 20 such agencies apart from Service Headquarters) involved in the procurement process can stymie the entire process through their observations and noting on the file.

The Army needs to induct various types of new equipment. The list includes new Arjun Mark II tanks and upgradation of its T-72 tank fleet and the infantry combat vehicle (ICV) BMP-2/2K fleet, procurement of about 1,500 Howitzer of 155mm 52-calibre, procurement of 145 ultra-light weight 155mm howitzers for the mountains from BAE Systems, weapon upgrades for air defence units of L-70 guns, ZU-23-2 twin-guns, and ZSU-23-4 Schilka, a lethal and sophisticated assault rifle for its infantry, and 197 light observation helicopters for the Army Aviation to replace the existing fleet of Cheetas and Chetaks and to induct attack and armed helicopters for close support of Army formations in the battlefield.

Additional requirements have to be catered for five new infantry/mountain divisions, out of which two have already been raised for the eastern theatre, for which various types of equipment including infantry weapons, light armour, artillery and small arms are required. Three more infantry divisions are required as a part of the mountain strike corps whose proposal has been accepted by the government. Over the next five to seven years or so, the Army will have to increase its manpower by about 1,20,000 soldiers.

The equipment listed above comprises the major items required and is by no means exhaustive while the capital budget this year is extremely modest. If the unimplemented schemes of Eleventh Defence Plan and the requirements of the Twelfth Five Year Plan (1213 to 1217) are added, the situation is extremely critical.

Air Force

The Air Force is looking to procure the 126 medium multi-role combat aircraft (MMRCA ) Rafale fighter aircraft from France, apart from 22 Apache 64-D attack helicopters from the US. In the pipeline there are also15 Boeing CH-47F Chinook heavy-lift helicopters for $1.4 billion, and six Airbus A330 multi-role tanker transport for about $1 billion. The total capital budget allocation to the Air Force under the heads aircraft and aero engines, heavy and medium vehicles, and other equipment amounts to Rs. 37,048 crore ($6.74 billion) and if about 80 per cent is used to pay for committed liabilities, it would leave about Rs. 7,409.6 crore for new purchases whose list is rather long.

Navy

The Indian Navy has been allotted Rs. 8,965.37 crore (about $1.63 billion) under various heads as compared to last year’s figure Rs. 4,968.13 crore (about $0.9 billion); almost a twofold jump. In addition, the Naval fleet has been allotted Rs. 11,772.26 crore (about $2.14 billion), as compared to last year’s figure of Rs. 11,012.90 crore (about $2 billion) which is a marginal increase. This amount is used for acquiring new ships and for paying for committed liabilities under capital acquisitions. The Indian Navy currently awaits the Ministry of Defence’s (MoD) decision on procuring 16 multi-role twin-engine helicopters (10-tonne), for which the Europe NH Industries NH-90 model is pitted against Sikorsky’s S-70B Sea Hawk. The advanced anti-ship and anti-submarine warfarecapable platforms, desperately needed by the Indian Navy to replace the ageing fleet of Sea King Mk42B’s had completed field trials in 2011. Other naval acquisitions include P-8I Poseidon multi-mission, maritime reconnaissance aircraft from the US and INS Vikramaditya (ex-Admiral Gorshkov), the 44,500-tonne Kiev class Russian aircraft carrier.