THE Estimates Committee report of the Indian Parliament on India’s operational preparedness has highlighted with predictable regularity the inadequacies in defence allocation, especially the year 2017-18. This is due to the absence of any systematic and institutionalised process of defence planning and budgeting. A plethora of reasons can be given for this recurring lacuna despite the 15-year Long Term Integrated Perspective Plan (LTIPP). This alone indicates that the Plan is merely integrated, not a joint tri-service plan as it should be. Since independent defence of the realm has been treated as the private preserve of civil and military bureaucracies, which are perennially sniping at each other with the higher political direction either absent or leased out to civilian staff.
Despite a number of ad hoc committees constituted to review the defence threat environment and necessary alterations to existing structures—like KVK Rao, Arun Singh, K Subrahmanyam, Naresh Chandra, Shekatkar, to name some – only tinkering has been done followed by cherry-picking by MoD in implementation. The fundamental problem is the overweight manpower-intensive army hogs the meagre funds at the cost of the equipment-intensive Navy and Air Force. The tooth-to-tail ratio today of the army after the implementation of the 7th Pay Commission after One Rank One Pension (OROP) is 17:83 whereas it should be 60:40.
Underlining the malaise is a faulty higher defence organisation and an erroneous national security and defence evaluation process. Never in the history of the country has a strategic defence and security review (SDSR) been done. And yet, the defence minister’s operational directive issued to the armed forces contains an assessment, which is done by the armed forces themselves (mainly Army) of a two-front war under nuclear overhang. The Cold Start doctrine disowned by the government and the two and a half-front war scenario were introduced in 2009 by Army Chief Gen. Deepak Kapoor after the Mumbai terrorist attack. Equally, there has never been a White Paper on defence. Without an SDSR and no jointness in organisation and structures, most of the planning is done in single service silos. Amusingly, the Integrated Defence Staff, which puts together single service plans, wrote a military training directive that was heavily criticised even without producing a national security or national defence strategies.
Prime Minister Narendra Modi addressed the Combined Commanders Conference at Jodhpur on September 28, and read out a recycled speech on what the armed forces should be doing without ordering the missing reforms to be executed. In four and a half years of his term, Modi has failed to appoint a CDS, which has awaited its incarnation for half a century. Defence Minister Manohar Parrikar had said several times that a CDS would be appointed in two years. In short, adhocism rules the roost. A new superfluous organisation called the Defence Planning Committee, chaired by the NSA, has been introduced which creates one more layer of bureaucracy.
The voluminous 500-page DPP 2016 has been reviewed seven times since 2002 and is still incomplete. Otherwise, some of the issues accompanying Rafale acquisition could have been avoided. For example, on the choice of Indian strategic partners for building of conventional submarines (Project 75), the section dealing with it is still to be completed. The DPP is the most confusing document and an unmitigated failure, which leads to procedural deviations and are ratified later.
UNTIL the government establishes a committee to do an SDSR in order to take a holistic view of the internal and external defence and security environment India will continue to do what Army Chief Gen. Bipin Rawat is embarking upon: restructuring to reduce flab or what Gen Ved Malik did in 1998: cut manpower by 50,000 to secure Rs. 500 crore for modernisation. The CCS along with NSC should focus on the Indian Ocean Region with sharpened deterrence against China and set aside its obsession with Pakistan. Threats, challenges and opportunities will dictate the building of capabilities in political, diplomatic, military and technological arenas. But to do this, you need a process, you need a system and skilled personnel to evolve anannual defence plan flowing from a 15-year Long Term Integrated Perspective Plan, ideally with a fiscal commitment of 2 to 2.5 per cent of the GDP and a five-year service capital acquisition plan.
It is instructive to examine the commitment to defence by the west, especially the US and UK.
Defence Budgets: US, UK and India
Look at how Donald Trump’s America has gone about making America great again. Pentagon has been given the biggest-ever defence budget in US history. And, while Modi had pledged to make India militarily strong in his pre-election speeches advocating heads-for-head and jaws-for-teeth, three years later the armed forces were awarded last year the lowest budget…one can add ‘ever’: Pentagon received $ 716 bn as allocations with increases of up to 17 percent that will sharply improve combat readiness says Defence Secretary Jim Mattis. In 2002 the defence budget was $ 345 bn but rose sharply after Afghanistan and Iraq.
India’s defence budget, including salaries and pensions in 2017-18, touched $ 62.8 bn. Of this only $ 43.4 bn is for defence. While the revenue budget has increased phenomenally due to 7th Pay Commission and One Rank One Pension, capital expenditure for modernisation was flat and in real terms, concave. The defence budget was 1.57 per cent compared to the lowest ever 1.49 in the 1950s.
FINANCE Minister Arun Jaitley in his speech highlighted operational preparedness and modernisation without mentioning that the armed forces have to fight a two and a half front war. The Parliamentary Standing Committee on defence headed by BJP’s Maj Gen. BC Khanduri, in their reports 35 and 36 say categorically: “India is not combat ready, is under equipped…” In other words, modernisation is woefully deficient. Khanduri’s critical report cost him his Chairmanship of the committee as he was prematurely removed—an act unprecedented in parliamentary history. The Khanduri report says that funds were so meagre that they would not support inevitable needs of the Army. The allocation of Rs. 21,338 crore for modernisation is insufficient even to cater for committed payments to the extent of Rs. 29,033 crore earmarked for 125 ongoing schemes, emergency procurement of armaments and weapons for 10 days of intense war and other Director General Ordnance Factory requirements.
Defence spending as a percentage of GDP is highest in Saudi Arabia (10 percent) Russia (5.3 percent) US (3.3 percent) UK (£ 56 bn or 2 percent) and India $ 62.8 bn (1.5 per cent). Defence allocations in UK have undergone revolutionary changes due to the overall size of the budget. It has the largest defence expenditure in EU, second highest in NATO and fifth largest in the world. Early this year, reports in London suggested that the Treasury had ordered military cuts of nearly £ 20 bn in the next 10 years. This led to the junior defence minister, Tobias Ellwood, threatening to resign followed by arguments between the Chancellor of the Exchequer, Philip Hammond, and Defence Minister, Gavin Williamson. Like the Institute of Defence Studies and Analyses (IDSA) in New Delhi assists the MoD with budget advice and other defence reviews, Royal United Services Institute (RSUI) in London does a more detailed analysis of defence spending—presenting options and plans with required funds. Very clearly RUSI is better integrated with MoD than our own IDSA.
THE revenue expenditure for National Security Capability Review or NSCR (distinct from Strategic Defence Review) may take defence out of it and have a separate defence capability for new equipment, equipment support and new capabilities. The NSCR is being done appropriately by NSA Mark Sedwell, Ajit Doval’s counterpart. The MoD annual budget for modernisation is £ 36 bn of a defence budget of £ 56 bn and there are never any instances of failure to utilise money for combat readiness.
Failure to Absorb Modernisation Account
In sharp contrast in India, over the past 10 years, at least Rs. 50,000 crore meant for capability enhancement was returned to finance either on demand or non-utilisation. This had to be done to balance the fiscal deficit.There is no need to fudge capital account figures as US is able to utilise all budget on modernisation and funds are not surrendered. In India, capital expenditure works out to less than 30 per cent, which is the reason for the Defence Parliamentary Standing Committee’s observation that the armed forces are not combat ready despite service Chiefs periodically telling the country they are ready to fight a two-front war.
Modernisation accounts for less than one-fifth of MoD allocations. Bulk of the money gets used for carry-over liabilities, undermined by inflation and devaluation of the rupee. To a question why more funds are not given to defence, Finance Minister Arun Jaitley gave different answers in successive years. In 2016-17 he said the ‘’armed forces do not have a mechanism to spend the capital budget’’. This year his reply to the same question was that “it had to do with the size of the cake available… otherwise the fiscal deficit would expand’’. The capital to revenue ratio of India’s defence budget works out to 33 percent to 67 percent, which is the opposite of the British defence budget.
THAT is why infantry soldiers who man the LoC 24X7 and are deployed in hostile terrain do not even have a modern rifle, bulletproof jackets and helmets. These projects have been in the pipeline for 15 years and have been cancelled, revived, and cancelled again for mysterious reasons. Not all permanent defences on LoC are shell-proof to direct hits from artillery and anti-tank missiles. Similarly posts do not have smart fencing as attack on Uri showed in 2016. Likewise there are gaps in perimeter security of fixed installations like air-bases such as Pathankot. The Campose Commission, which did a study on similar bases, recommended investment of Rs. 500 cr for their enhanced security but funds were not allotted. We are losing soldiers on LoC and hinterland due to absence of robust security and camps and permanent shell-proofing on posts. This does not include civilian habitat, which are very vulnerable.
After years of inaction, Defence Minister Nirmala Sitharaman this year appointed a 13-member committee that will review all modernisation projects which are cleared but stuck in the pipeline. The committee has a high-sounding title: RM’s Advisory Committee on MoD Capital Projects above Rs. 5 bn to strengthen modernisation and defence preparedness, the by-words of Jaitley’s defence budget speech and the core of the Estimate Committee’s report. Whether this is one more committee to expedite utilisation of capital defence expenditure or time pass as in previous years, only time will tell.
Earlier this year, following news of £ 20 bn cut over next 10 years in UK, the cat was set among the pigeons. Many options were put on the table of amalgamating forces like Commando Brigade and Air Assault Brigade and pruning defence commitments. For example, in one option the army could reduce from the existing 82,000 to 50,000 the smallest number since the battle of Trafalgar. No such pruning measures are envisaged as there is no higher political direction flowing to the CDS. Incidentally the CDS was created in UK following orders from Defence Secretary Michael Haseltine, despite protests from single service chiefs.
Remember, UK has the most advanced Trident sea-launched nuclear ballistic missile capability worth £ 36 bn and two of the world’s most modern aircraft carriers, prompting a journalist to quip that UK could become Belgium with nukes. With an empire from Belize to Hong Kong for over 200 years, will UK now have to shed its power projection capabilities/expeditionary forces or restrict defence missions to ‘defence of our shores including counter terrorism’, remain tied to NATO and Europe and defend UK from next generation threats like cyber warfare?
RESILIENCE and deterrence will remain the defining catalysts for defence and combat readiness. Still for the British soldier, losing his cap badge is the ultimate hara-kiri. The British system relies on a man -machine mix that favours high -tech equipment suitably meshed into an agile and tech-savvy soldier. We are still groping for the mix which suits our culture and ground conditions.
India must take a lesson in defence planning and procurement procedures to incorporate modern methods of comparing capabilities of aircraft carriers, Rafale squadrons and Strike Mountain Corps. Until we adopt the programmes, plans and budgeting system, it is unlikely that we will be able to achieve the 70:30 target for modernisation and manpower costs. India must also undertake a strategic defence and security review to analyse and execute systematised structural reforms, not just to fix tooth to tail ratio.
With this government fixated on winning elections and not serious about operational preparedness as it believes there will be no war, defence budgets will get tighter and there will be even more stress on modernisation next year if oil prices continue to rise and the rupee touches 100 to the dollar. Then there is CAATSA (Countering American Adversaries Through Sanctions Act) against which a Trump waiver is not a given. If the contract is signed ignoring CAATSA, in October 2018 as envisaged India will have to make a down payment of 15 percent of the Rs. 39,000 Cr deal in dollars. That will eat up all if not most of the modernisation money next year—the election year when funds will be heaped on social welfare schemes.
Financial transaction in dollars will not be easy. The defence budget maybe part of vote on account in an election year, but it will not be Achhe Din for the Armed Forces, whose primary focus for the foreseeable future will be countering terrorism and violent extremism. In other words, internal security entwined in external challenges, will be the predominant mission for the army.
(The writer was the founder-member of Defence Planning Staff, revamped now as the Integrated Defence Staff)