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No adequate budget to meet our hopes of modernisation: Army vice-chief

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(G.N.S) Dt. 14
New Delhi
In a strong indictment of the inadequate budgetary allocation for the Indian Army, Vice Chief of Army Staff (VCOS) Lt. Gen. Sarath Chand told the parliamentary panel on defence that Budget 2018-19 has “dashed” all hopes of modernisation of the force which is saddled with equipment of which more than two-third is “vintage”.
He added that the marginal increase in the budgetary allocation barely accounts for inflation, and the Army won’t be able to pay instalments of past purchases with the money it has received.
“Budget 2018-19 has dashed our hopes and most of what has been achieved has actually received a little setback,” Lt. Gen. Chand said while deposing before the parliamentary panel, and added that this may lead to foreclosure of 25 “Make in India” defence projects that are currently in the pipeline.
A modern military should typically have 30% of its weaponry and equipment in the state-of-the-art technology category, 40% in current category and 30% in vintage category. But the over 12-lakh strong Indian Army is grappling with an alarming 8% (state-of-the-art), 24% (current) and 68% (vintage) weaponry mix while it’s engaged in daily cross-border firing duels with Pakistan and heightened tensions with China since the Doklam stand-off last year. The Army feels a two-front war scenario is a clear and present danger.
“The 2018-2019 budget has dashed our hopes … The marginal increase barely accounts for inflation and does not even cater for taxes,” Army vice-chief Lt-General Sarath Chand told the parliamentary committee on defence.
Allocated just Rs 21,338 crore for modernisation, the Army simply does not have enough money to pay instalments worth Rs 29,033 crore for 125 ongoing schemes and deals inked earlier as well as emergency procurements of ammunition made in the aftermath of the Uri terror attack and “surgical strikes” in 2016 to ensure reserves for 10 days of “intensive war-fighting”.
Similar is the case with road and infrastructure development along the China border, among other things. “We, in the Army, also identified as many as 25 projects for the `Make in India’ policy. However, there is no adequate budget to support this. As a result, many of these may end up foreclosed,” said Lt-Gen Chand.
Top officers of IAF, Navy and Coast Guard also sounded similar alarms, leading the committee to slam the government for starving the armed forces of requisite funds for both modernization and day-to-day operational sustenance.
“We are aghast to note this dismal scenario where the representatives of the Services have themselves frankly explained the negative repercussions on our defence preparedness due to inadequate fund allocations,” said the committee, chaired by BJP leader Major General B C Khanduri, in a series of reports tabled in Parliament on Tuesday.
The picture is indeed grim, with even defence secretary Sanjay Mitra admitting before the committee that the finance ministry “is not supporting the defence ministry as per its requirements”. The “net” defence budget for 2018-2019 at Rs 2.79 lakh crore works out to just 1.49% of the GDP, the lowest such figure since the 1962 war with China.
The Army, for instance, has got just 60% of its projected requirement under the capital head for modernisation and new weapon systems. The Navy and IAF, in turn, got 56% and 46%. The capital outlay shortfall is Rs 17,757 crore for Army, Rs 15,692 crore for Navy and Rs 41,925 crore for IAF.
The allocated funds are not enough to even pay for “committed liabilities or instalments” of earlier arms contracts, leaving virtually nothing for new modernisation projects. The story was similar under the revenue head for day-to-day operating costs, which in any case dwarfs the capital outlay in a skewed 67:37 ratio due to a ballooning salary bill.
Similarly, taking note of the “unsympathetic attitude” towards naval modernisation, the committee said, “A budget deficit of nearly 40% will indeed have a cascading impact on the operational preparedness and technological up-gradation of the Navy.”
Despite being the world’s largest arms importer, India does not get enough bang for its buck in the absence of concrete long-term planning to systematically build military capabilities in tune with its geopolitical objectives. Consequently, the Army has critical gaps in artillery guns, infantry weapons, light helicopters, night-fighting capabilities and the like. While the IAF does not have enough fighters, mid-air refuellers, AWACS and drones, the Navy is grappling with the lack of adequate number of submarines, multi-role helicopters and minesweepers.
Parliamentary Standing Committee on Defence warns centre over inadequate defence budget
In an indictment of budgetary allocations made for the services, the Parliamentary Standing Committee on Defence has noted that the fund allocation “is not supportive to the inevitable needs of the Army”. The committee also found that there are “huge deficiencies and obsolescence of weapons, stores and ammunition existing in Indian Army”.
Presenting its forty-first report to Parliament on 13 March, 2018, the Major General BC Khanduri-led Parliamentary Standing Committee on Defence lambasted the union government for inadequate defence budget allocations. The Committee has observed that the “allocation of Rs 21,338 crore for modernisation is insufficient even to cater to committed payments to the extent of Rs 29,033 crore earmarked for 125 ongoing schemes, emergency procurement of armaments and weaponry for 10 days of intense war, and other Director General Ordnance Factories requirements”.
The Committee has been extremely critical of the 4.5 percent increase in the revenue component of the Army’s budget, pointing out that this will get totally consumed during the implementation of the Seventh Pay Commission. Noting that out of a projection of Rs 40,073 crore for operations and maintenance, only an allocation of Rs 30,791 crore has been made, the Committee said, “The budget for operations and maintenance is a critical component for ensuring operational preparedness at any given point of time.” It also noted that allocations made for the Services are “not supportive to the inevitable needs of the Army”, with “huge deficiencies and obsolescence of weapons, stores and ammunition existing in Indian Army”.
The most serious observations of the Committee were: the Army is holding 68 percent of vintage category, just about 24 percent of current category, and only eight per cent of state-of-the-art category; increase of 2.84 percent in the Navy’s budget would not even cater to inflationary pressure – maintaining requisite armament level and emergency procurements will require more funds, and a shortfall of Rs 6,440 crore in the revenue budget of the Indian Air Force (IAF) is likely to impact operational preparedness, ability to procure spares and fuel, apart from leaving gaps in the force’s training program, serviceability of older systems and provision of basic amenities to personnel.
It would be prudent to acknowledge that while the Chairman of Committee, General Khanduri, is from the BJP (he was a union minister during NDA I), this is an all-party committee, which needs to be taken seriously. But that is unlikely to happen despite some serious TV debates on the evening of 13 March, where the government was represented by a young spokesperson trying to defend defence allocations, arguing nominal percentage hikes, which actually amount to negative defence budgets in actual terms without accounting for inflation and associated factors. It would have been appropriate for the Defence Secretary and the Finance Minister to justify the recurring measly defence allocations under the present government.
After all, it is the Finance Minister who has been arbitrarily slashing down defence budget projections, without taking into consideration evolving threats and operational requirements, as pointed out by the Committee on an earlier occasion. The Defence Secretary (not the Defence Minister) continues to be charged with the defence of India under the Allocation of Business & Transaction Rules Act 1961, which has not been changed for dubious reasons.
The unfortunate part is that this is not the first time that the Parliamentary Standing Committee on Defence has indicted the government. In its report tabled in Parliament on 9 March, 2017, the Committee had slammed the government for its adhocism, casual and lackadaisical approach saying it would adversely affect the country’s defence preparedness as well as hit the morale of the forces.
The highlights of this report included: in terms of modernization demands for FY 2017-2018, the Army, Navy, and Air Force have only received 60, 67, and 54 percent respectively; only Rs 86,488 crore has been earmarked for modernization from the total defence outlay of Rs 2.74 lakh crore – what makes matters worse is bulk of this capital will be used to pay ‘committed liabilities’ of earlier arms contracts instead of new projects. The Committee had asked the government to allocate an additional Rs 13,000 crore for defence in the current financial year ending 31 March, but nothing has been allotted. Unfortunately the Defence Budget 2018-2019 too is ‘negative’ in actual terms.
India’s security challenges are unique. The country faces serious internal security threats, proxy war, and external security threats from two nuclear capable adversaries who are in a strategic alliance aimed at limiting India’s strategic space. India’s defence spending has not been in tune with its strategic security needs. If defence allocations are not increased the asymmetry in the defence capability vis-a-vis China will increase to unacceptable levels. And this may well happen with no heed paid to arbitrary capping of defence allocations without taking operational imperatives into cognizance.
Unfortunately, the Parliamentary Standing Committee on Defence only has an advisory role and this report too will pass. After two-three days of hullabaloo, the media will lose interest and the discussion will be replaced by one about Karti Chidambaram, Sunanda Pushkar’s death, the farmer agitation or something else. The fact that the China-Pakistan threat continues to grow will be brushed under the table. Already, motivated views are being put out that the talk of war is all rubbish and needs to be stopped. A rosy picture is also being painted about a reset of relations with China. But war itself is not understood, leave aside hybrid war. The fact remains that ruling out a standoff at the border escalating to higher conflict can be most stupid in the current scenario.
It would be prudent to heed what Army Chief General Bipin Rawat said at the Vivekananda International Foundation on 13 March. The “Chinese have finally arrived…. They did not forget that military power should rise simultaneously with the economy. That is why they stand strong today in the international world order, challenging the might of (the) USA…. There is a belief (in India) that the defence expenditure is actually a burden on the state. They believe that whatever is put in defence it is something that comes without any returns. I want to dispel that myth. If your economy has to rise, you have to ensure security to that establishment that is going to be poured in your country.”

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