India has emerged as the third-largest military spender, lagging behind only the US and China.
A recent report on defence spending by India is likely to trigger demands for a cut in the country’s military expenditure and the use of the saved allocation to boost the social sector. While the call for more resources in areas of health, education and family welfare etc can be justified, it would be improper to punish the defence sector in the process. Because the story of India’s defence spending goes beyond the headlines the latest report has thrown up.
Swedish think-tank Stockholm International Peace Research Institute (SIPRI) has, in a recent report, identified India as among the world’s three biggest military spenders in 2019. India’s spending was $71.1 billion. This sounds big, and in percentage terms, it’s equally impressive — at a 6.8 per cent increase over 2018, it is more than the hike registered by the other regional power, China (5.1 per cent). The report also stated that India’s military spending grew by nearly 259 per cent in the period 1990-2019 and by 37 per cent in the last decade. India has emerged as the third-largest military spender, lagging behind only the US and China. In 2019, it spent more than Russia and Saudi Arabia, the other two nations comprising the world’s top five military spenders, the SIPRI report titled, ‘Trends in World Military Expenditure 2019’, said.
The revenue head also caters to some other major expenses such as transportation and repairs, both of which are critical components in having a fit and running Armed Forces.
Now let’s look at some other figures that offer a more holistic picture. The $71.1 billion India spent is peanuts compared to that by China and the US. China’s military expenditure in 2019 was $261 billion, while that of the US was $732 billion for the same period. Thus, India’s contribution to the global military spending of $1917 billion is only a small fraction as compared to these two countries; China’s is nearly 14 per cent. Domestically speaking, the share of military spending to its GDP actually fell over the last decade from 2.7 per cent to 2.4 per cent. Even this small percentage would look worse if one were to exclude huge expenses such as defence pensions. For instance, in the last Budget for 2020-21, the allocation made for the defence sector (if one excludes the pension component), accounts for just 1.5 per cent the country’s GDP.
Those who express alarm at the 37 per cent increase in our defence expenditure over the previous decade, need to look not beyond Pakistan, one country whose threat perceptions India’s defence planners have to forever bear in mind. In the corresponding period, Pakistan’s defence spending went up by and much as 70 per cent — nearly twice the increase India posted. Not just that, its defence expenditure to its share of the GDP has also steadily gone up; from 3.4 per cent in 2010 to four per cent in 2019, according to SIPRI.
If anything, there is a need to get out of this rut of 2-3 per cent of GDP and provide far more to the defence sector in the Budget if the Modi government needs to keep its big-ticket projects to fortify the country’s defence preparedness on track. The 2020-21 Budget saw a hike of only 5.8 per cent in allocations over the previous financial year. Of the Rs 3.37 lakh crore, the defence sector has been allocated, the capital outlay (which takes care of acquisitions and modernisations) is Rs 1.18 lakh crores; it was Rs 1.08 lakh crore in the Budget Estimates for 2019-20. Just how this marginal increase can take care of the nation’s pressing defence needs, remains a matter of concern. Of course, the government has repeatedly assured that funds would not be a constraint, but it would be nice to see that reflected in more robust defence budgets.
It is true that the revenue head expenses continue to be larger than the capital outlay. That may be understandable, since revenue head expense includes pay and allowances, including increments in salaries etc that come from time to time — as well as other pending dues, such as in the case of the One Rank One Pension scheme. The revenue head also caters to some other major expenses such as transportation and repairs, both of which are critical components in having a fit and running Armed Forces. But what is less understandable, and justified, is the near freeze on revenue head expenses as well. As the mandate of our Navy, Army and Air Force expands, given the country’s geo-strategic needs, both capital outlay and revenue expenditure have to match such ambitions.
Several studies conducted by reputed organisations have argued for higher allocation for defence spending for India in the Annual Budget.
It is a given that arguably no country’s defence force gets all the money it desires or demands. But the defence sector should also not be left crippled. Even a casual look at India’s defence spending will reveal that our policymakers have reacted to the issue in knee-jerk manners. There are promises of more money for the defence forces in the wake of a military crisis imposed by outside challenges; funds are even mysteriously found for the military. But with the passage of time, the defence sector gets back to receiving a raw deal.
Several studies conducted by reputed organisations have argued for higher allocation for defence spending for India in the Annual Budget. On the other hand, there are those who argue that whining about low allocation is an exercise in vain; the military must learn to make the optimum use of what it has and can realistically get in the near future. India, after all, is not a rich or developed country. It has other, more pressing priorities. That may be so, but the price of giving step-motherly treatment to the defence sector will outweigh the advantages.
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.