India must allow armed forces to raise own finances. Defence budget will never be enough

Ever since the confrontation with China in the mountains of Ladakh, and the threat of escalation to war, retired armed forces officers have been calling for an increase in capabilities of their respective Services, and advocating new strategies to ward off an aggressive enemy. The Narendra Modi government reacted with the usual firefighting tactics by approving arms procurement worth $5.5 billion, including new aircraft from Russia, and fast-tracking decision-making to allow each Service to purchase systems it requires urgently. All these are welcome moves, at a critical time. But the point is this — China may or may not have encroached on Indian territory, however it has certainly succeeded in driving New Delhi to allocate scarce resources towards defence at a time when it needs every penny to bring a pandemic-hit economy back on track.

The truth is that India’s defence budget has never been able to keep up with actual expenditures. The game of catch up has got worse with domain experts pointing out that this gap between allocations and requirements has risen steadily to about 30 per cent in the last seven years. The coronavirus pushed the Centre to further impose cuts across ministries, with the defence ministry – which consumes just one-seventh of the budget — also asked to further limit expenditures; all this when the Report of the Standing Committee on Defence had warned in 2019 that ‘huge deficiencies and obsolescence of equipment’ did not augur well for a two-front war, or indeed, any war at all.

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