India’s defence needs more funds4 min read . Updated: 05 Jan 2021, 11:40 PM IST
As China ups the ante, the finance minister has no choice but to allocate more money in the budget for modernizing India’s armed forces, say experts
More resources for technology and innovation, and building of infrastructure along the India-China border, besides raising budgetary support for the Indian Navy and increasing defence purchases by ₹10,000 crore topped the wishlist of defence experts who on Monday took part in a panel discussion at Mint’s “Road to Recovery" series in the run-up to the Union Budget for FY22 on 1 February.
While India was looking to harness artificial intelligence (AI) to develop smart cities, and for agriculture and healthcare solutions, Rajeshwari Rajagopalan, who deals with nuclear and space issues at the Observer Research Foundation (ORF) think tank, made a strong pitch for employing AI in the military and security domain as well.
Besides Rajagopalan, the experts’ panel on “Countering the China challenge: from the borders to cyberspace" comprised former Indian ambassador to Russia P.S. Raghavan; former defence secretary G. Mohan Kumar; Laxman Behera, associate professor at Jawaharlal Nehru University; and Lt Gen (retired) S.L. Narasimhan.
The experts expected finance minister Nirmala Sitharaman to raise the defence budget in view of the tensions along the border with China but were of the view that a substantial chunk of the allocations could be earmarked for salaries and pensions. They expressed concerns over the dwindling resources for modernization and new acquisitions for the armed forces, more so at a time when the Indian economy is in a recession following the stringent lockdown to stem the spread of covid-19.
Behera said the need of the hour was to initiate “hard reforms", that is, a reduction in the wages and pensions component of the defence budget. Though the panellists were divided over the quantum of increase for the defence sector, all of them agreed that China was a major strategic threat that India must be prepared for. In 2018, a parliamentary standing committee had suggested that the defence budget should be 3% of gross domestic product (GDP).
“Today’s wars are not only fought on land, sea and air. They are fought with technology. So, you have cyber space, you have electronics, you have information (warfare). Many of these may not come directly in the defence budget. Let us see what we require for our national security and then see how we find the finances for it," said Raghavan, who was the chairman of the National Security Advisory Board.
“Our defence (budget) has a mix of revenue and capital expenditure…We need to see how we can increase the spend on hardcore defence," Raghavan added.
The panel discussion came against the backdrop of the ongoing military face-off between India and China in Ladakh, which enters its ninth month this week. In the past, India mostly focused on the threat of terrorism emanating from Pakistan, and expected that a series of agreements signed with China between 1993 and 2013 will keep the border stable while New Delhi and Beijing ironed out the differences over the demarcation of the frontier, said Mohan Kumar.
“But the situation has changed. China has become hegemonistic. We cannot expect China to behave in a predictable fashion. Countering China is a big challenge for India because if you look at the defence expenditure that China incurs, it is something like $270 billion every year, whereas India’s total defence expenditure is $71 billion. We have a peculiar task of being ready for any threat on both the borders," he said.
He said that India’s revenue budget (salaries and pensions) has been climbing steeply while money available for capital expenditure or modernization has been declining. “If revenue expenditure erodes capital expenditure, we will not be able to go forward in capability building."
Kumar said defence allocation should be equivalent to at least 3% of India’s GDP.
ORF’s Rajagopalan’s concerns over the defence budget being “disappointing year after year" was supported by other analysts, too. India’s defence budget as a proportion of the central government’s expenditure and GDP has been decreasing over the past decade. In 2010-11, defence expenditure was 2.5% of GDP, which fell to 2.1% in 2020-21.
The Standing Committee on Defence (2018) had recommended that the ministry of defence should be allocated a fixed budget of about 3% of GDP to ensure adequate preparedness of the armed forces.
Lt General Narasimhan agreed that while India’s defence forces needed more money and modern equipment, “we also need to anticipate the kind of incidents that happened during this summer". The reference was to the incursions by Chinese forces, which resulted in the violent flare-up at Galwan Valley and claimed the lives of 20 Indian soldiers and an unknown number of Chinese troops.
“This was a surprise," he said, adding that India did not expect China to backtrack from all the agreements that were signed between 1993 and 2013.
China, on its part, has been steadily increasing its defence spends with conservative Chinese government estimates suggesting an allocation of $178 billion last year, while international think tanks estimate it to be at least $250 billion.
The country had made substantial investments in artificial intelligence, drone technologies as well as cyber and space technologies.
To counter China, Mohan Kumar suggested that India must look at establishing technology missions that would look at specific areas—from artificial intelligence to space and cybersecurity.
Indian businesses should be encouraged to partner with the government to develop niche technologies and capabilities, he added.
India has already opened the doors for private sector participation in defence manufacturing, including the production of hardware, and has announced a number of incentives. India’s premier Defence Research and Development Organisation (DRDO), too, has started the process of sharing technologies developed by it with the private sector for commercial production of weapon systems.