Actual defence budget of ‘deceptive’ India

India showcases its ‘transparent’ defence expenditures on websites. But the real expenditure in past years has been much greater than exhibited on websites.

India defence

India’s Union Budget for the financial year 2020-21 envisages a total outlay of Rs. 30,42,230 crore. Out of this, 3,37,553 crore has been allocated for the military (excluding military pension). For military pensions, an amount of Rs. 1,33,825 crore has been provided in Budget Estimates 2020-21. There is an increase of Rs. 40,367.21 crore in the total military allocations (Rs. 4,71,378 crore) including military over the financial year 2019-20. Total military budget accounts for 15.49 per cent of the total central government expenditure for the year 2020-21.

The allocation of Rs. 4,71,378 crore represents a growth of 9.37 per cent over Budget Estimates (Rs. 4,31,010.79 crore) for the financial year 2019-20. Out of Rs. 3,37,553 crore allocated for the financial year 2020-21, Rs. 2,18,998 crore is for the Revenue (Net) expenditure. 

Rs. 1,18,555 crore is for capital expenditure for the Defence Services and the Organisations/Departments under the Ministry of Defence. The amount allocated for capital expenditure includes modernisation related expenditure. A think-tank published the key indicators as shown in the following table which slightly differs from some media reports.

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India’s Military Budget

Key Indicator           

Indicator 2019-20 2020-21
Military Budget (Rs. in Crore) 3,05,296 3,23,053
Growth of military Budget (%) 9.3 5.8
Revenue Expenditure  (Rs. in Crore) 2,01,902 2,09,319
Revenue Expenditure (Rs. in Crore) 2,01,902 2,09,319
Growth of Revenue Expenditure (%) 8.9 3.7
Growth of Revenue Expenditure (%) 8.9 3.7
Growth of Revenue Expenditure (%) 8.9 3.7
Share of Revenue Expenditure in Military Budget (%) 66 65
Capital Expenditure (Rs. in Crore) 1,03,394 1,13,734
Growth of Capital Expenditure (%) 10.0 10.0
Share of Capital Expenditure in military Budget (%) 34 35
Share of Capital Expenditure in Central Government Capital 31 28
Capital Acquisition (Rs. in Crore) 80,959 90,649^
Growth of Capital Acquisition (%) 9.2 12.0
Share of military Budget in GDP (%) 1.49 1.44
Share of military Budget in Central Government Expenditure (%) 11.0 10.6
Defence Pension (Rs. in Crore) 1,12,080 1,33,825
Growth of military Pension (%) 3.0 19.4
MoD (Civil) (Rs. in Crore) 13,635 14,500
Growth in MoD (Civil) (%) -15.9 6.3
MoD’s Budget (Rs. in Crore) 4,31,011 4,71,378
Growth in MoD’s Budget (%) 6.6       9.4
Share of MoD Budget in GDP (%) 2.1 2.1
Share of MoD Budget in Central Government Expenditure (%) 15.5 15.5

 

Deceptive figures 

India showcases its ‘transparent’ military expenditures on websites. But the real expenditure in past years has been much greater than that exhibited on websites. In the past, India unnoticeably increased its military outlays in revised and then actual estimates. Thus the actual military expenditure is much higher than the initial estimates, quoted in international media under a hypnotic spell.

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To hoodwink the general reader, India deflates its military expenditure through clever stratagems. It publishes its `demands for grants for “defence” services’ separately from demands for grants of civil ministries that include its defence ministry (MoD).

It clubs military pensions in civil estimates. Several other quasi-military provisions are similarly shoved in civil estimates. Such concealed defence provisions include public-sector undertakings under MoD like dockyards, machine tool industries (Mishra Dhatu Nigham), and Bharat Heavy Electrical Limited, besides space-and-nuke/chemical/biological-research projects, border and strategic roads and a host of paramilitary forces (Border Security Force, Industrial Reserve Force, etc.).

Why India does so? 

It does so to `lower’ its military budget as a proportion of Gross National Product. Through such ploys, India, as compared with its neighbours, gets a favourable image in The Military Balance, Jane’s Defense, and other international magazines.

The analyses of India’s military spending suffer from an inherent shortcoming. They have to rely on figures showcased by India on official websites. As such, the true quantum of military budget is deflated. The deflated figures are used to make inter-country, inter-region or endogenous comparisons like military budget as a proportion of total civil and military outlay.

Without a hard copy of Explanatory Memorandum to Demands for Grants, it is difficult to analyse the budget. The approved outlays are further increased via revised outlays and upward readjustments of actual-expenditures.

The memorandum could throw light on India’s mega purchases. They include carbine rifles for the army, Advanced Jet Trainers, Airborne Warning and Control system, additional Mi-17 Helicopters, MiG-29 upgrade, Low-Level Transportable Radar, Integrated Air Command and Control System and Surveillance Radar Element in respect for the air force. Weapon Locating Radar and T- 72 upgrade in respect of the Army, Rafaels, so on.

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During his visit to India, President Trump of the United States offered to sell India US$ 3 billion (per one unit) Terminal High Altitude Area Defense (THAAD) and Patriot Advanced Capability (PAC-3) missile defence systems as an alternative to the Russian S-400 system. India ditched Russia from whom it had decided to purchase five Russian S-400 air defence systems at a cost of US$5.4 billion. With US tacit support, India is getting tougher with China.

Recall the 73-day standoff on the Doklam (Donglang in Chinese) plateau near the Nathula Pass on Sikkim border last year. Being at a disadvantage vis-a-vis India, China was compelled to resolve the stand-off through negotiations. In the later period, China developed high-altitude “electromagnetic catapult” rockets for its artillery units to liquidate Indian advantage there, as also in Tibet Autonomous Region. China intends to mount a magnetically-propelled high-velocity rail-gun on its 10,000-ton-class missile destroyer 055 being built.

Twenty-first century will hinge on the Indian Ocean

India took up the development of the Sittwe Port in Myanmar as part of the Kaladan multi-modal transit transport project. It sees it as an opportunity for building a multi-modal sea, river and road transport corridor for shipment of cargo from the eastern ports of India to Myanmar through Sittwe. India upgraded its existing listening post in northern Madagascar. India has obtained access to the US naval base in Diego Garcia, and to the French naval bases in Mayotte and Reunion islands, besides Australian naval base in Cocos.

Robert Kaplan, in his book, Monsoon: The Indian Ocean and Future of American Power, argues that the geopolitics of the twenty-first century will hinge on the Indian Ocean. Waters of the Indian Ocean reach 28 countries which together account for 35 per cent of the world’s population and 19 per cent of the world’s Gross Domestic Product. Sixty per cent of the world’s oil shipments from the Gulf countries to China, Japan and other Asian countries pass through these waters which host 23 of the world’s busiest ports.

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China is currently exploring an area of 10000 Square kilometres in the South-West Indian Ocean Ridge through its state-controlled China Ocean Mineral Resources Research and Development Association. It is also exploring the Clarion- Clipperton Fracture Zone in the Pacific.

Simultaneously, China is modernising and upgrading its naval fleet on a massive scale. Besides, China is technologically augmenting its indigenous manufacturing capability by empowering its two largest state-owned shipbuilders, China State Shipbuilding Corporation and Shipbuilding Industry Corporation. Conspicuously, India is set for big purchases in the new budget to master the skies and the Indian Ocean. It reflects her desire to establish her hegemony in the region.

India: World’s third-largest spender on defence

Stockholm International Peace Research Institute (Sipri) has observed India’s military spending grew 6.8 % to touch $71.1 billion outpacing Japan ($47.6 billion) and South Korea ($43.9 billion). The US, China and India were the world’s three biggest military spenders in 2019, followed by Russia and Saudi Arabia. Now, the two Asian countries have become the top three for the first time. The three countries were ahead of Russia ($65 billion) and Saudi Arabia ($61.8 billion) who together were world’s top military spenders.

Russia and Saudi Arabia accounted for 62% of the global military spend including salaries, benefits, operational expenses, arms and equipment purchases, military construction, research and development, central administration, command and support. India’s spending rose by 6.8 % and touching $71.1 billion outpacing Japan’s ($47.6 billion) and South Korea’s ($43.9 billion).

Read more: India’s outgunned Russia and Saudi Arabia to become the world’s fourth-largest defence spender

Misconception

Indian policy of increasing military outlays is based on strategic misconceptions. India thinks it would be suicidal for Pakistan to increase its military budget pari passu with India’s. In any case, Pakistan could not afford to spend more than half the increase in India’s military budget. A higher allocation would sap Pakistan’s resource potential for growth in future.

India thinks Pakistan has to choose between Scylla and Charybdis, that is economic collapse or military preparation. India’s perceptions historically have proved to be wrong. Pakistan neutralised the impact of this differential economic performance by, going nuclear, and developing tactical nuclear weapons like Nasr short-range missile.

Comparison with Pakistan

Pakistan conventionally mentions ‘a one-line cumulative military outlay’ in its defence budget. This gives the negative impression that defence establishment compels lawmakers to thumb-impress military demands for grants.

Ayesha Siddiqa, author of Military Inc.: Inside Pakistan’s Military Economy says, “Pakistan’s Auditor General has expressed reservations in the past at the Public Accounts Committee meeting at the National Assembly about the lack of auditing of the military budget.” Her view is based on the fact that, in 2016, the Auditor General of Pakistan, a constitutional body empowered to examine all government expenditures made from public money, told the Pakistani parliament that the funds given to military institutions were exempt from audit.

The truth, however, remains that Pakistan’s military authorities, including its defence ministry, publicly announced that they would provide whatever information the people’s representatives need. The reps have never been curious notwithstanding.

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Pakistan’s defence demands undergo a rigorous scrutiny by relevant parliamentary committees and audit bodies. Legislators and MoD babus are properly briefed about the need for provisions. Whenever demanded, the details of the defence budget for the current, as well as for the coming, financial year were placed before the parliament. Even the expenditure on Zarb-e-Azb appeared more than once in the media.

Most legislators lack the acumen to analyse numerical rigmarole. So they do not wish to be bothered with the job being done by competent professionals in various ministries and parliamentary committees.

Pakistan should separate expenditure of forces to defend China Pakistan Economic Corridor and key installations including parliament from normal demands for defence grants.

Historically, a common feature of all strong states was that they had a strong military and civil institutions, dejure capability to defend their territory and policies that favoured the citizenry rather than the dominant classes. 

Let us see how our vociferous opposition strikes a balance between constraints of security and welfare. In case our lawmakers feel handicapped in understanding the intricacies of defence budgeting in the context of the internal and external security situation, GHQ may arrange a briefing for them.

Back in 1996-97, British Labour Party Defence Study Group tried to highlight the defence burden on the public exchequer. In that report, they drew comparisons between the defence and social costs. For instance, £ 7,000 million cost of Tornado multi-role combat aircraft project was more than the total cost of Britain’s health and personal social services projects for 1976-77. £ 16 million price of the Frigate Ambuscade could provide a new 50S-bed hospital in Bangor. The submarine Superb was more expensive than building 4,000 new homes.

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Lt Gen Attiqur Rehman in my defence course says: “In a democracy, the defence services belong to the people through their representatives in parliament. Thus, the people have the right to know what is going on, how their money is being spent, and how the defence services are being managed and administered. They have a right to know everything, except details of the actual war plans.”

Some concealed aspects

Nuclear research

Indian Air Force chiefs keep Indian Air Force ( IAF) is capable of detecting nuclear targets in Pakistan and is ready to strike them out. But, the decision has to be taken by the government. India’s another swaggering braggart, ex-army chief now CDS chairman is never tired of claiming India’s capability to fight a two-front war with China and Pakistan, and win it. Any war could flare up into nuclear Armageddon. India conceals its real nuclear bomb-making capacity under civil ministries’ provisions.

Nuclear/Chemical capability

It is pertinent to mention that Robert S. McNamara, in his address to the World Bank on April 25, 1991, inter alia classified India among the ‘countries reported by the Western governments as seeking a CW capability or suspected to be possessing chemical weapons’.

Distribution of Chemical Weapons, 1990, states that the classified countries denied possession of chemical weapons, or intentions to acquire such weapons.

Methyl isocyanates were being produced at the Union Carbide India when it exploded, killing thousands of people. There were 27 factories producing products including Carbaryl through cyanates supplied by UCIL. Where does provision for CBW research appears in India’s military budgets?

The Washington Post reported in 2013 that the police in occupied Kashmir published a notice in the Greater Kashmir (now under blackout), advising people about nuclear-war survival tips. The tips included constructing well-stocked bunkers in basements or front yards, and having a stock of food and batteries or candles to last at least two weeks.

Colossal expenditure on conventional weapons by nuclear power is not understood. Nuclear deterrence does not mean matching bomb for bomb.

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A US proxy

India is emerging as the US proxy against rising China, which is determined to surpass the USA in GDP by 2027. India is opposed to China’s Belt and Road Initiative. Besides, it uses its aid, trade and border contiguity to obstruct Chinese influence in Bhutan, Nepal, and Bangladesh. At India’s bidding, those countries follow the Indian line in SAARC and other international forums like G-20.

In 2005, Washington expressed its intention to help India become a major world power in the 21st century (according to K. Alan Kronsstadt, Congressional Research Service Report for Congress, 13 February 2007). It was later re-affirmed by Ambassador David Mulford in a US Embassy press in 2005. The USA’s resolve later translated into the modification of domestic laws to facilitate the export of sensitive military technology to India. The Nuclear Supplier Group also relaxed its controls to begin exports to India’s civilian nuclear reactor (enabling India to divert resources to military use).

Ambitions of becoming a great power

Raj Mohan, Shyam Saran and several others point out that India follows Kautliya’s mandala (concentric, asymptotic and intersecting circles, inter-relationships) doctrine in foreign policy. It is akin to Henry Kissinger’s `spheres of influence’. According to this doctrine, all neighbouring countries are actual or potential enemies’. However, short-run policy should be based on common volatile, dynamic, mercurial interests, like the intersection of two sets.

Former Indian foreign secretary, Shyam Saran in his book How India Sees the World says, ‘Kautliyan [Chanakyan] template would say the options for India are sandhi, conciliation; asana, neutrality; and yana, victory through war. One could add dana, buying allegiance through gifts; and bheda, sowing discord. The option of yana, of course, would be the last in today’s world’ (p. 64, ibid.). It appears that Kautliya’s and Saran’s last-advised option is India’s first option, concerning China and Pakistan, nowadays.

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Raj Mohan elucidates India’s ambition, in terms of Kauliya’s mandala (inter-relationships), to emerge as South Asian hegemon in the following words:

‘India’s grand strategy divides the world into three concentric circles. In the first, which encompasses the immediate neighbourhood, India has sought primacy and a veto over actions of outside powers.

In the second who encompasses the so-called extended neighbourhood, stretching across Asia and Indian Ocean littoral, India has sought to balance of other powers and prevent them from undercutting its interests.

In the third which includes the entire global stage, India has tried to take its place as one of the great power, a key player in international peace and security. (C. Raja Mohan, India and the Balance of Power, Foreign Affairs July-August 2006).

Henry Kissinger views Indian ambitions in the following words: ‘Just as the early American leaders developed in the Monroe Doctrine concept for America’s special role in the Western Hemisphere, so India has established in practice a special positioning the Indian Ocean region between East Indies and the horn of Africa.

Like Britain concerning Europe in the eighteenth and nineteenth centuries, India strives to prevent the emergence of a dominant power in this vast portion of the globe. Just as early American leaders did not seek approval of the countries of the Western Hemisphere concerning the Monroe Doctrine, so Indian in the region of its special strategic interests conducts its policy based on its definition of a South Asian order’ (World Order, New York, Penguin Press, 2014).

Zbigniew Brzeszinsky takes note of India’s ambition to rival China thus: ‘Indian strategies speak openly of greater India exercising a dominant position in an area ranging from Iran to Thailand. India has also positioned itself to control the Indian Ocean militarily, its naval and air power programs point clearly in that direction as do politically guided efforts to establish for Indi strong positions, with geostrategic implications in adjoining Bangladesh and Burma. (Strategic Vision: America and the Crisis of Global Power).

India’s ambition to become the South Asian hegemon is reflected in its successive defence budgets. Aside from the showcased marginal increase in the defence budget, the three services have been asked to devise a five-year model plan for capital acquisitions.

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The Indian navy wants a 200-ship strong fleet by 2027. Navy Chief Admiral Karambir Singh had in December pointed out China added over 80 ships in the last five years. The Navy wants to procure six new conventional submarines and 111 Naval Utility Helicopters to replace the vintage fleet of Chetaks. The IAF wants to procure 114 new fighters besides the 36 Rafales ordered in 2015, still in process.

Quaid on Indo-Pak joint defence

Pakistan’s founder Quaid-i-Azam Mohammad Ali Jinnah cherished desire for lasting Indo-Pak peace even before the creation of Pakistan. During his last days, The Quaid was perturbed at the Cold War rivalry emerging between the USA and the USSR.

The Quaid keenly desired that the subcontinent and all of South Asia should remain aloof from the rivalry. Therefore, he proposed a joint defence pact with India. Had India accepted his idea, the two countries would not have been at daggers drawn after independence.

Before his final flight (Aug 7, 1947) from Delhi to Pakistan, he sent a message to the Indian government, “the past must be buried and let us start as two independent sovereign states of Hindustan and Pakistan, I wish Hindustan prosperity and peace.” Vallabhbhai Patel replied from Delhi “the poison has been removed from the body of India. As for the Muslims, they have their roots, their sacred places and their centres here. I do not know what they can do in Pakistan. It will not be long before they return to us.”

Even Nehru, an ostensibly liberal leader, regarded the creation of Pakistan as a blunder. His rancour against Pakistan reaches a crescendo in his remarks: “I shall not have that carbuncle on my back.” (D. H. Bhutani, The Future of Pakistan, page 14). Will India stop its worldwide defence purchases to open a new chapter in relations with Pakistan?

Let India lower its expenditure first! It should be a leader to compel Pakistan to follow suit. It must shun hegemonic designs, at least for the time being, when Covid-19 rages.

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Inferences

Any analysis of India’s military budget should be based on actual demands for grants coupled with explanatory memoranda. The allocations concealed under civil ministries outlays should be ferreted out and added to military allocations. The successive increases n revised and then actual budget estimates should be taken into account.

As a result of India’s rising military expenditures, Pakistan also increases its defence expenditure. If Pakistan weakens its defence by slashing its defence expenditure, will India guarantee that it will not attack Pakistan or go for a quasi-attack? (Operation Parakram costing Rs. 74 crore). The colossal increase in big brother’s military budget is untenable in light of its teeming millions living below the poverty line.

Each year India increases its defence budget. The estimated outlays are further increased via revised outlays and upward re-adjustments of actual-expenditures.

India’s rising defence expenditures appear to have been actuated by a misconception of national security. The national security of a country depends upon many factors, variously interpreted and defined like soldiers’ morale, scientists’ ingenuity, military and political leaders’ character and skill, geographic position, and economic wherewithal.

Indian planners are oblivious of the fact that, in general, the more resources the nation devotes to national security, the less it will have for social security and vice versa. Some economists conceive of a ‘social welfare function’ to be maximized by an appropriate allocation of the nation’s resources satisfying various objectives (including defence).

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National security, for an economist, depends on three factors: (a) The number of national resources available, now and in future, (b) The proportion of these resources allocated to national security purposes, and (c) The efficiency with which the resources so allocated are used.

Resources are always limited vis-à-vis unlimited wants. As such, the problem of defence allocations should, in effect, be a problem of constrained resource optimization, not blind allocation of resources. Let India lower its expenditure. 

Mr. Amjed Jaaved is an editor to The Consul. His contributions stand published in the leading dailies at home and abroad (Nepal. Bangladesh, Sri Lanka, et. al.). He is author of seven e-books including Terrorism, Jihad, Nukes and other Issues in Focus. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.

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