22:00 GMT12 August 2020
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    New Delhi (Sputnik): Last year, Indian Finance Minister Nirmala Sitharaman kept the defence budget unchanged from the interim one of $44 billion, despite enhanced requirements from the armed forces against the backdrop of rising tensions with Pakistan after the Balakot airstrike on 26 February 2019.

    The Indian Armed Forces have been left high and dry once again after the budget allocations for the defence sector witnessed a nominal rise for modernisation for 2020-21.

    “Defence” was missing from the over 2.5-hour budget presentation speech by Sitharaman, who has previously also served as the defence minister and thus is aware of its key requirements and much-needed financial support.

    Defence analyst and Indian Air Force Air Marshal Anil Chopra (retired) said that the marginal increase in the defence budget will adversely impact the modernisation of the armed forces and affect several big ticket projects.

    “Bulk increase will go to pay and pensions. Military needs out of budget allotments to catch up on modernisation backlog”, Air Marshal Chopra said, adding that most of India’s defence budget is consumed by salaries and pensions of close to 60 percent on nearly 4.9 million personnel.

    As per the defence budget document, the finance ministry has proposed $16.6 billion for capital expenditure in the defence budget, including pensions, of around $66 billion, compared with $60 billion for 2019-20. The government has proposed only a $1.4 billion hike in the capital budget for the armed forces. The worst concern is cutting down the capital budget for the air force. As per the document, the Indian Air Force will receive $6.5 billion for capital procurement in comparison to last year's budget of $6.7 billion.

    “Most of the capital budget would go for committed liabilities. Down to 30 fighter Squadrons (one squadron=18 fighter jets), IAF cannot afford delays in fighter acquisitions. Avro transport aircraft replacement is already awaiting funds for years since selection”, Air Marshal Chopra added.

    Data available in the public domain suggest that the Indian Defence Ministry will have to pay around $69 billion in the next five years for the committed liabilities (already signed contracts till 2019) for all three services and joint commands.

    Trailing in Two-Front War

    The Parliamentary Standing Committee, while submitting a report in January 2020, mentioned that the availability of funds for the armed forces was inadequate to counter the “increasing threat perceptions and modernisation to face a ‘two-front war’”. A two-front war implies war with China and Pakistan at same time.

    The Indian Air Force (IAF) has been facing a slow pace of modernisation, such as the purchase of 114 fighter jets, due to unavailability of the required funds. Besides the fighter jet requirement, the IAF has been waiting for years to induct more mid-air refuellers and all-new transport aircraft.

    Facing a severe cash crunch amid an assertive approach taken by China in the Indian Ocean, the Indian Navy last year demanded additional funds from the Finance Ministry. But all efforts seem to have gone in vain due to slowing economic growth. The Indian Navy was forced to cut down its ambitious plan to have a 200-ship strong fleet to a 175-ship strong force by 2027 in the absence of adequate availability of funds.

    On the other hand, defence analysts have pointed out that China’s People’s Liberation Army Navy have added more than 80 warships in the last five years in the Indian Ocean Region, which was noted by Indian Navy Chief Admiral Karambir Singh in December 2019.

    The Indian Defence Ministry also trimmed the purchase of Boeing-made P-8I spy planes by half for the Indian Navy due to the availability of fewer funds for modernisation. Earlier, the navy had planned to purchase 10 long-range anti-submarine warfare aircraft from the American manufacturer at a cost of around $3 billion.

    Potential Solution

    Facing a shortage of funds for modernisation on a regular basis, the Defence Ministry has recommended levying a special cess to raise funds to meet the shortfall in the defence budget. The recommendations were made to the 15th Finance Commission, which tabled its report in the parliament ahead of presenting an annual budget on Saturday. The Defence Ministry said that the nature of the threats India faces require more preparedness.


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