Defence Allocation: Budgeting for Muscular Policy

How much money should the country spend on its defence?  The Union government’s Budget 2018-19 has allocated Rs 2,95,511 crore for the three Services. This constitutes 12.10% of the Union Government’s total expenditure of Rs 24,42,213 crore, and is higher then the previous year’s allocation by 7.81%. 

Forty per cent of the above amount – Rs 1,18,966 crore – forms the salary bill for the Services as well as Civilian personnel. 

Of the total Rs 2.96 lakh crore, Rs 99,563 crore (nearly Rs 1 lakh crore) is the allocation for capital expenditure in 2018-19. Besides, Defence Pension is an intrinsic part of Defence Expenditure and has been provided Rs 1,08,853 crore. Thus the actual Defence Budget as per the Expenditure Budget for 2018-19 is Rs 4,04,365 crore, which constitutes a little more than 16.5% of the Total Expenditure and 2.16% of the GDP. 

This is generous by any stretch of imagination. However, this does not cover the entirety of the allocation. Armed Forces of the Union are made up, as per the Indian Constitution, of three services as well as the Central Para-Military Forces (CPMFs), (described in Budget papers as Central Police Force). Modelled on the Irish Constabulary, they are not a police force serving the community, but a para-military force trained as infantry battalions of the Army and deployed to suppress rebellious/recalcitrant people.

No less than 500,000 Army personnel are deployed to fight militancy in 101 districts of Jammu and Kashmir and the North East. It is important to note that the Jammu and Kashmir Light Infantry (JAKLI), until May 1977 known as J&K Militia, became a 17 battalion strong regiment operating under and administered by the Army. The Army also raised a 75 battalion strong counter-insurgency force called Rashtriya Rifles (RR) in the 1990s for the Jammu and Kashmir which was declared “Disturbed”.  

JAKLI and RR and the use of Assam Rifles in the North-East is not all. The regular Army too carries out operations as the recent incident in Shopian shows, where the RR first went to the village in the morning, and then in the afternoon, the 10 Garhwal Rifles unit entered the village in defiance of the police advisory against it and fired and killed three civilians. 

Besides, ninety per cent of the 1.12 million strong CPMFs are deployed in 101 districts of North East, Jammu and Kashmir and against the CPI (Maoist) guerillas in 58 districts of Central India. 

So both Services as well as CPMFs which together make up 2.8 million are primarily engaged in fighting armed conflicts at home. The allocations for CPMFs have continued to grow, the one sector where government employment has continued to be augmented. Thus the size of the CPMFs was 1,024,374 in 2016, rose to 1,108,683 in 2017 and is estimated to reach 1,125,093 in 2018. 

Seen against this, the number of employees of the central government (minus the Armed Services) rose from 3,252,796 in 2016 to 3,480,697 in 2017 and is estimated to rise to 3,505,809 in 2018. 

No less than 84,309 personnel were added to CPMFs between 2016 and 2017 according to Budget Profile 2018-19, out of a total of 2,27,901 new recruits. [Next highest recruitment at more than 75,000 was in the Tax Department].

The Ministry of Home Affairs has been provided Rs 92,680 crore of which Rs 87,887 crore is for “internal security”. 

If we just consider what CPMFs have been provided, i.e. Rs 62,742 crore, then the actual Military Budget of Government of India, i.e. allocation for Armed Forces and the CPMFs combined, comes to Rs 4,67,106 cr. This would make up nearly 20 per cent of the Rs 24.42 trillion Total Expenditure of the Government of India. This constitutes about 2.5 per cent of India’s GDP.

Why indignation at the Defence Capital Budget      

In the last four years, Rs. 2,40,000 crore worth of military contracts have been signed. In other words, an average of Rs. 60,000 crore worth of contracts signed every year. 

Since 15% is what is paid out as advance payment when contracts are signed all that is required is Rs 9000 crore towards outgo. In other words, there are sufficient funds allocated to sign military contracts.  The point is that signing contracts worth $10-12 billion every year remains the main source of equipment. 

In other words, the problem does not lie with fund shortages, but has much to do with BJP-RSS government being unable to lure Original Equipment Manufacturers (OEMs) to invest in India under the ‘Make in India’ plank. Most OEMs want the Indian Government to incentivise military investment by placing large orders and also guaranteeing that while manufacturing may shift to India the ownership and control over technology will remain with the OEMs. The problem is that a one-time large order itself does not suffice; the order must be such that it remains lucrative for the OEM to remain invested over a long term. Such a commitment would be difficult to meet, because this ties up resources for a long time, independent of whether the security scenario has undergone a change for the better or not. 

For all the rhetoric employed by the BJP-RSS, they have little to show for their ‘Make in India’ boast and the country continues to rely on imports of defence equipment. As the Rafael deal shows, this results in huge benefits to crony corporate houses while the government ends up buying, at exorbitant prices, fewer aircraft than apparently needed.

It is also worth recalling that the Ministry of Defence dismissed the alarm raised by the Comptroller and Auditor General who spoke of “inadequate ammunition” in war reserves. Instead of reserves for 40 days it was said that the reserves would suffice for no more than 20 days. MoD insisted that the CAG was “factually wrong”.  

As a result when editorials scream “Starving Defence” and point out that both in 2001 after the attack on Parliament as well as 2008 after the Mumbai attack the forces could not provide a military option to the political leadership and cite Operation Parakram as a “needless stand-off” they are being selective and dated. What is interesting is to note that under the BJP-RSS dispensation, the “military option” has been overused and there has been a rise in ceasefire violations with Pakistan in J&K – 583 in 2014, 405 in 2015, 449 in 2016 and 840 in 2017. It is a reminder that not only has the Indian government exercised the military option but that such “options” are illusory, turn civilians and soldiers into cannon fodder for the two armies, tend to become more virulent and fail to act as a deterrent. What lends weight to this is also the ground reality of J&K where the BJP-RSS emphasises Pakistan’s role whereas the spread and popularity of armed militancy in Kashmir is due to a ruthless policy of suppression accompanied by indifference to seeking political resolution.

The language employed reveals the viciousness of this war of attrition. Following the killing of four Army personnel on February 5, while the Army officers spoke of the “direct method” of reply implying sniper attacks and “indirect methods” which involves artillery fire and mortar shelling, there is advocacy of inflicting “human damage” on Pakistan’s Army and the proud claim that their multi barrel rocket launchers can turn “one km of Pakistan’s territory into ash”.  On January 12, the Army Chief spoke of causing “pain” to Pakistani Armed Forces and that in any exchange of fire Pakistan suffers “three to four times the casualties (which India incurs)”. But the cost India incurs is not just loss of lives, livelihood but also wastage of scarce resource on a useless conflict which is located in the internal dynamics of Indian politics in which Pakistan plays only a secondary role. 

So in calculating the cost and analysing the reasons for these, we cannot escape questions about the reasoning and premises behind the policy. For instance, ”traditional (Indian) naval assumption” has been to have the potential to squeeze Chinese shipping at the choke point of Malacca Strait and thus deter China. The question we should be asking is, why does the Indian government want to become a tail of the US to do its bidding to contain China? What purpose and whose purpose are served in igniting “face-offs” with China which is our neighbour as well as India’s largest trading partner? Why go in for heightened military posturing vis-à-vis China? Choosing a path of confrontation with our neighbour and preparing for military conflict basically in order to safeguard the national interests of the US make no sense.  One of the most outlandish, borrowed idea is that of ‘rule-based international order’ which does not sit too well on its US or NATO spokesmen with their penchant for unilateralist and arbitrary acts including military aggression defying rules, concocting new ones, and waging wars of aggression (such as those in Korea, Indo-China, Iraq and Afghanistan). So the issue is not the rule-based international order which China is defying, but whether India should be ganging up with the US and its allies to contain and confront China.

It is when we begin to ask such questions that it becomes evident that there are ways in which the country can save on wasteful expenditure and yet ensure that it can defend itself. One place to start is to critically look at the manpower costs of the Armed Forces.