GOOD MONEY DOWN DEFENCE DRAIN

Abhijit Iyer-Mitra

03 March 2015 

The strategic community wants us to believe that the defence Budget is not enough — it isn’t — and that the Finance Minister is to be blamed for the Armed Forces’ lack of preparedness. He isn’t. The military must reduce wasteful expenditure to get more bang for the buck

This year’s Budget seems almost entirely lacklustre, focussing as it does, on nudges and incrementalism and, in some cases, just holding the fort. Here’s why this is not necessarily a bad thing. The clearest case of holding the fort has been the Defence Budget of Rs2.46 lakh crore. In real terms, this has meant that the Defence Budget has shrunk to 1.75 per cent of the gross domestic product from previous year’s 1.78 per cent.

Also, it may seem that there has been a 10 per cent hike in dollar terms — from last year’s slightly over $38 billion to this year’s just over $40 billion — but this is not exactly the case. The less than two billion dollar raise has been possible only because the Government could not spend its 2013-2014 allocation and returned just over a billion dollars back to the exchequer.

Predictably, the strategic community has started howling about how these expenditure levels are pre-1962 levels in terms of percentage and leave the country vulnerable since the Armed Forces need so much more equipment etc. The facts are undisputable, but the analysis, sadly, is way off the mark.

The fundamentals point here are that neither Finance Minister Arun Jaitley compensate for the failure of the Armed Forces to streamline themselves nor can a country that has spent the last 10 years in economic doldrums suddenly afford to divert vast additional sums to what is basically a non-productive parasitic expenditure.

Essentially, what people who demand a larger Defence Budget are saying is this: First, ignore the fact that the three Forces have haywired notions of modern combat and refuse to rationalise procurement. So, just give them whatever big guns and toys they want.

Second, unlike in defence exporting countries, where the defence sector adds significantly to the GDP, India’s defence sector does not. So, let’s keep gifting more money to foreign contractors. Third, forget the fact that the Armed Forces and the defence bureaucracy can’t get their act together. Let’s just throw heaps more of good money after bad policies, hoping to make the Forces better.

Here are a few examples to illustrate the point. Last year, in addition to the unspent one billion dollar, a further one billion dollar was diverted from capital expenditure (ie the allocation to buy new equipment etc) to revenue (ie for operations and maintenance). This only reinforces the argument that the Armed Forces have no concrete idea about how much it costs to run the fleet of equipment they already have.

For another example of financial confusion, look at how much each Service spends on the revenue account (that is, on operations and salaries). The Army spends Rs74,119 crore on salaries, the Navy Rs6288 crore, and the Air Force Rs11,360 crore. These figures mask a whole range of reality. If we split this expenditure per person, the Army invests approximately Rs6.8 lakh per person per annum, the Navy Rs11.5 lakh and the Air Force Rs10.4 lakh per person.

In many ways, this sums up the value addition and prioritisation of personnel and their exposure to danger. Note that the Army spends almost half per person than the Navy, even though it is the Army jawans that face the highest danger levels and exposure on a day-to-day basis.

Moreover, the Navy also insists that all its employees get engineering degrees — an investment in their future as well as the overall competence of the Navy. The surprising factor here is the Air Force which spends less per person than the Navy. This is not the trend in most countries with advanced air and naval combat capabilities.

In simple terms, the Army really doesn’t give a damn about its jawans and is about care even less once the ill-conceived mountain divisions are raised. The Air Force also needs to be spending a lot more on human resources in order to incentivise top talent, commensurate with the levels of technology it operates. Clearly, the Air Force doesn’t grasp the need for value addition. The Navy is the only service that seems to have its personnel plan somewhat in order.

Next, look at the wishlist and equipment manifests of the three Services. The Army wants to have three different kinds of main battle tanks, which is sure to be a logistical nightmare. Also, its focus on tanks shows that it is still stuck in the mid- 20th century paradigms of warfare, as if it is planning to win the Turkey Shoot arcade game. The Army refuses to internalise the core lessons of the revolution in military affairs and has not even moved into late 20th century paradigms of warfare, leave alone 21st century ones.

The Air Force operates six different kinds of combat aircraft with severe duplication of roles and a logistics train that would scare Lord Voldemort. Moreover, it can’t get the existing assets to work properly but still wants to buy expensive toys like the Rafale medium multi-role combat aircraft and the fifth generation Russian fighter programme, PAK-FA, as if these will solve its problems.

The Air Force also complains about inadequate allocations but insists on buying superfluous equipment like 56 medium transport aircraft which are essentially just VIP transports for self-important officers. The Navy refuses to zero in on one propulsion plant, one torpedo, one anti-ship missile or for that matter one of anything — spreading precious resources very thin. This list can go on, but somehow our strategic community will have us believe that poor financial planning is the Finance Minister’s fault and the military has no responsibility to streamline itself and reduce its wasteful expenditure.

We are also to believe that simply by buying sophisticated foreign equipment, we will somehow get a first world fighting force, no matter the fact that our expenditure levels on personnel, their safety and value addition is at third world levels. As Singapore’s first Prime Minister Lee Kuan Yew said “you can only get monkeys for peanuts”. Somehow our military believes that the finest and best of India will dance for peanuts.

This is in no way to suggest that the current Defence Budget is enough, but the military needs to stop whining and extract maximum bang for buck — something it is not even willing to pay token lip service to. In the foreseeable future, this Budget will have to do and the military simply has to get used to it.