In announcing a total defence allocation of Rs 246,727 crore for the financial year 2015-'16, which is a modest 11% increase over last year, Finance Minister Arun Jaitley did not spring any surprises and stuck to a predictable status quo.
Extrapolating from the estimated fiscal deficit (Rs 555,600 crore) as a percentage of GDP for the same period, it may be inferred that India’s defence budget in the year that will unfold will be under 1.75% of overall national GDP. This figure corresponds with 2014-'15, when it was 1.74% of GDP. In 2013–'14, the defence allocation was 1.8% of GDP. Thus a marginal decline relative to GDP is discernible as per the preliminary estimates. So no big surprise here.
Returned unspent
Yet another statistic that can be gleaned from the figures released on Saturday is the total amount actually spent in the last financial year. The estimate for defence for 2014-'15 was pegged at Rs 229,000 crore in July 2014, when the Modi-led National Democratic Alliance government presented an interim budget. The revised estimate tabled on Saturday stood at Rs 222,370 crores.
In other words, the defence ministry under Manohar Parrikar returned Rs 6630 crore as the unspent amount to the national exchequer. Again, no surprise – for this follows a pattern of the last 15 years. When Prime Minister Vajpayee was in the saddle during NDA I, beginning from 2000–'01 to 2003–'04, the annual amount that was returned unspent by the defence ministry to the central pool was to the order of Rs 8,900 crore; Rs 7,700 crore; Rs 9,300 crore and Rs 5, 200 crore respectively. George Fernandes was the defence minister at the time.
Later with Manmohan Singh at the helm, the Congress-led United Progressive Alliance had a similar tale and during the 2005–'06 to 2007–'08, the amounts unspent were Rs 2,400 crore; 3,500 crore and 4,300 crores. Ironically, in 2012–'13, the amount unspent was a staggering Rs 11, 600 crores even when the Indian military was in dire need of inventory infusion across the board.
The empirical trend-line that emerges is that the ministry of defence is unable to spend the funds allotted in the beginning of the financial year. This when the Indian Army has been waiting for a replacement to the Bofors gun acquired in the late 1980s, the air force is crying hoarse for fighter aircraft and the navy’s submarine strength is shrinking rapidly. The platforms listed are illustrative of a deeper inventory and equipment malaise for all the armed forces. The few years when the defence budget was revised to reflect extra spending was when the Pay Commission dues and arrears were disbursed to serving and retired personnel.
Hopes belied
Also missing in Jaitley's speech was the much hoped for budgetary allocation for "one-rank one-pension", to the dismay of the serving and retired military personnel. This is only the tip of the ice-berg among many other pay and allowance anomalies that include the unsavoury precedent of the defence ministry petitioning the courts against modest entitlements for the disabled soldier. That this will have an adverse impact on the morale of the military as an institution is self-evident.
Hence the preliminary take-away from the defence allocation is that it does not allow for any tangible modernisation of the existing military inventory that is afflicted with alarming obsolescence, and that the morale and the welfare of the troops is of little concern to the current government, which makes it no different from the UPA.
In short, neither the quality of the gun nor the welfare of the man behind the gun seems to matter and the status quo is being maintained. The only silver lining is that the national fiscal security (by way of restricting the deficit ) is being achieved – albeit in a manner that may be detrimental to the sinews of India’s long term defence capability. Clearly, Defence Minister Parrikar has his job cut out and can only hope that February 2016 will offer a radically different template.
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Extrapolating from the estimated fiscal deficit (Rs 555,600 crore) as a percentage of GDP for the same period, it may be inferred that India’s defence budget in the year that will unfold will be under 1.75% of overall national GDP. This figure corresponds with 2014-'15, when it was 1.74% of GDP. In 2013–'14, the defence allocation was 1.8% of GDP. Thus a marginal decline relative to GDP is discernible as per the preliminary estimates. So no big surprise here.
Returned unspent
Yet another statistic that can be gleaned from the figures released on Saturday is the total amount actually spent in the last financial year. The estimate for defence for 2014-'15 was pegged at Rs 229,000 crore in July 2014, when the Modi-led National Democratic Alliance government presented an interim budget. The revised estimate tabled on Saturday stood at Rs 222,370 crores.
In other words, the defence ministry under Manohar Parrikar returned Rs 6630 crore as the unspent amount to the national exchequer. Again, no surprise – for this follows a pattern of the last 15 years. When Prime Minister Vajpayee was in the saddle during NDA I, beginning from 2000–'01 to 2003–'04, the annual amount that was returned unspent by the defence ministry to the central pool was to the order of Rs 8,900 crore; Rs 7,700 crore; Rs 9,300 crore and Rs 5, 200 crore respectively. George Fernandes was the defence minister at the time.
Later with Manmohan Singh at the helm, the Congress-led United Progressive Alliance had a similar tale and during the 2005–'06 to 2007–'08, the amounts unspent were Rs 2,400 crore; 3,500 crore and 4,300 crores. Ironically, in 2012–'13, the amount unspent was a staggering Rs 11, 600 crores even when the Indian military was in dire need of inventory infusion across the board.
The empirical trend-line that emerges is that the ministry of defence is unable to spend the funds allotted in the beginning of the financial year. This when the Indian Army has been waiting for a replacement to the Bofors gun acquired in the late 1980s, the air force is crying hoarse for fighter aircraft and the navy’s submarine strength is shrinking rapidly. The platforms listed are illustrative of a deeper inventory and equipment malaise for all the armed forces. The few years when the defence budget was revised to reflect extra spending was when the Pay Commission dues and arrears were disbursed to serving and retired personnel.
Hopes belied
Also missing in Jaitley's speech was the much hoped for budgetary allocation for "one-rank one-pension", to the dismay of the serving and retired military personnel. This is only the tip of the ice-berg among many other pay and allowance anomalies that include the unsavoury precedent of the defence ministry petitioning the courts against modest entitlements for the disabled soldier. That this will have an adverse impact on the morale of the military as an institution is self-evident.
Hence the preliminary take-away from the defence allocation is that it does not allow for any tangible modernisation of the existing military inventory that is afflicted with alarming obsolescence, and that the morale and the welfare of the troops is of little concern to the current government, which makes it no different from the UPA.
In short, neither the quality of the gun nor the welfare of the man behind the gun seems to matter and the status quo is being maintained. The only silver lining is that the national fiscal security (by way of restricting the deficit ) is being achieved – albeit in a manner that may be detrimental to the sinews of India’s long term defence capability. Clearly, Defence Minister Parrikar has his job cut out and can only hope that February 2016 will offer a radically different template.
