Out of cash

The hurdles in the way of military modernisation

The modernisation of the Indian military will not come cheap. And now, it appears it won't come on time, either. When Defence Minister A K Antony announced that the $16-billion deal (about Rs 1 lakh crore) to buy 126 Rafale medium multi-role combat aircraft, or MMRCA, from the French company Dassault could not be finalised this financial year, the reason he gave was financial constraints. Essentially, although the entire payment was not to be made upfront, even the signing fee was beyond India's budget at the moment. The reason is easy to see: capital expenditure budgets have remained largely static, even as various deals have been entered into. This means that "committed liabilities" have eaten into the capital expenditure budget, leaving much less than 10 per cent most years for new deals. This financial year, just Rs 2,955 crore out of a capital expenditure budget of Rs 73,444 crore was available for new contracts. The Rafale plane would have cost at least Rs 15,000 crore upfront.

Naturally, many of the purchases that have been made are important. But other big gaps remain to be filled. Aside from the MMRCA, the army needs, for example, towed artillery - which, also, is out of the budget this year. Nor is it clear when any such purchase could be made. Clearly, major problems exist with the planning and prioritisation of defence purchases. The general constraints are twofold. One is, of course, the urgent need to restore macroeconomic stability by bringing down the fiscal deficit - keeping it within the finance minister's "red line" of 4.8 per cent of gross domestic product. This is in any case hard to achieve. Politically, cutting many subsidies has proved difficult. But defence modernisation must not be seen as an easy target for cuts, either. Instead, greater efficiency and saving in spending need to be worked on.

The second constraint is the continued confusion and lack of co-ordination when it comes to planning purchases. Here, too, saving would have been possible if greater indigenisation had been forced on the services earlier, or if the various branches of the service had been compelled to share weapons platforms. Sadly, this has not happened. The armed forces need to realise that a budget constraint means that they will have to deal with Indian sources for arms - even if it appears that they are not the best available. This will, of course, have major national-security payoffs in the medium to long term. And, finally, better co-ordination would mean that there is no duplication of expensive purchases, such as that of electronic warfare systems. But that would require a combined planning staff. In other words, the best thing that the government could do in order to decrease the pressure on the defence budget is to move forward with the long-standing proposal for a chief of defence staff, who could ensure that the doctrine of "jointness" - bringing all three uniformed branches closer together - pays dividends in terms of spending. This is an overdue move. Either way, military modernisation cannot be put off to some halcyon future in which there will be enough money. Asia is unsettled now, not in the distant future. India's military needs to be brought up to the mark.