India's defence spending falls below two per cent of GDP

By Praful Kumar Singh

New Delhi, Mar 4 : For the first time in the last 10 years the defence spending will fall below two per cent of the Gross Domestic Product (GDP) due to fiscal pressures and larger allocations for farm, health and education sectors.

The successive parliamentary committees on defence have recommended allocation to be raised to at least 3-3.5 per cent of the GDP if the armed forces are to rapidly modernise.

The outlay will fall short of the requirements if the programme for acquisition of modern aircraft for the Indian Air Force, new ships and submarines for the Indian Navy and new Artillery for the Army are to materialise.

In addition the pay commission will levy further burdens on the budget. There is no indication that Finance Minister P Chidambaram has provided for the proposed increase in salaries for defence personnel as suggested by the Defence Ministry.

"Indian military modernisation is suffering due to the incremental approach whereas military world over are modernising rapidly," said Brigadier (retired) Gurmeet Kanwal, Director of Centre for Land and Warfare Studies (CLAWS).

Brigadier Kanwal said that 10 per cent hike is not much when there is an inflation of 4 to 4.5 percent, and added that actual hike is around five percent.

He said that due to bureaucratic red-tapism some contracts failed to materialise last year.

India's defence spending continue to be below two per cent of the GDP far less compared to Pakistan's five per cent and China's almost seven per cent.

India seldom spends its entire budget allocation for defence because of red tape associated with arms purchases, and defence analysts said unless it clears pending deals faster, the budgetary allocation would not make any difference.

The budgetary hike to defence sector in actual terms is 14.16 per cent as compared to that of last year because the Defence Ministry could only spend rupees 925 billion, leaving a sum of Rs35 billion unspent.

The cancellation of two major contracts for purchase of helicopters and 155 MM artillery guns led to the rise of 4.16 per cent in budget.

Defence sector was allocated Rs1056 billion, a hike of 10 per cent from last year's allocation of Rs 960 billion to speed up the modernisation plans, but the process is delayed by red tapism and bureaucratic hurdles.

It is clear that the budget will focus on up gradation of armaments with the allocation on capital outlay running into Rs480 billion, a hike of almost 23.3 per cent over last year's outlay of over Rs377 billion.

Capital estimates last year were over Rs419 billion of which the Defence Ministry only spent Rs377.05 billion.

Of the total allocation, Rs.480 billion has been earmarked for the purchase of hardware and Rs.579 billion for the three services and for R and D.

Of the three services, the fourth largest army will likely get the lion's share of (Rs362 billion), followed by the Indian Air Force (Rs108 billion) and the Indian Navy (Rs74 billion).

The Defence Research and Development Organisation (DRDO) has been allocated Rs33 billion.

In addition, Rs155 billion for pensions and Rs440 million for the 22 Sainik Schools in the country to enable them improve their infrastructure and sports facilities.

There are several big procurements in the pipeline, which range from the Rs 80 billion purchase of eight long-range maritime reconnaissance aircraft for the Navy to the Army's Rs 120 billion artillery modernisation plan.

India is also planning one of its biggest ever arms purchases, a 10 billion dollars deal to buy 126 fighter jets.

ANI