Figures don’t lie. The payroll expenses and the pensions and the post-retirement sustenance costs (besides pensions, access to canteen and health services for life) are barreling out of control, taking an ever bigger chunk of the exchequer. Based on the truncated one rank, one pension (OROP) accepted by the BJP government with equalization every five years (instead of every two years as suggested by the ex-servicemen’s organizations), the financial subvention for the human resources (HR) category (roughly the defence budget on revenue account + the pensions budget (with 2013 used as base year for one rank, one pension calculations) will hit the country . The scale of outgo on this account will become apparent in its totality when the 2019-20 budget is presented. But even without accounting for the OROP tsunami, the numbers are absolutely stunning. Consider the budgetary figures:
|Rs 2,59,262 crores||Rs 2,79,305 crores
|Growth of Def Budget (%)||16.5||7.7|
|Rs 1,72,774 crores||Rs 1,85,323 crores|
|Growth of Rev expend (%)||20||7|
|Share Rev Exp in Defbud(%)||67||66|
|Capital Expend||Rs 86,488 crores||Rs 93,982 crores-|
|Growth of Capital expend(%)||10||9|
|Share of Capital Expend (%)||33||34|
|Cap Acquisition (Rs In Crore)||Rs 69,473 crores||Rs 74,224 crores (approx)|
|Growth Cap Acquisition (%)||-0.6||6.8 (approx)|
|Share of Def Budg in GDP (%)||1.54||1.49|
|Share of Def Bud GOIExp(%)||12.1||11.4|
|Defence Pension||Rs 85,740 crores||Rs 1,08,853 crores|
|Growth of Def Pension (%)||4||27|
(Source: Laxman Behera, “”Defence Expenditure 2018-19”, https://idsa.in/issuebrief/defence-budget-2018-19-controlling-manpower-cost-lkbehera-020218 )
The HR outgo for the army in 2018-19 of Rs 2,94,176 crores almost equals the total defence budget and, at the present rate of growth will, by next year, exceed it by a furlong. (For simplification of analysis purposes, the military’s pensions and revenue budgets are not here disaggregated but lumped in with the navy’s and air force’s, also because the manpower of the smaller services are dwarfed by the army’s; compared to ‘army’s strength of 1.3 million, the air force is 140,000-strong, and navy 100,000-strong.)
With the 5-yearly automatic escalator plugged in, the defence budget will, quite literally be uncontrolled or uncontrollable by the Finance Ministry (as evidenced in the 23% growth on the pensions spend in just one year), even as capital/force modernization plans will have to be sporadically funded — as is already the case now but for reasons principally of absence of inter se prioritisation — or shelved altogether because there will not be enough resources available for them. But the separation of pensions and defence budgets is a bare-faced device to divert attention and soften — on paper — the fiscal impact, because the source of the funding of all these streams is the same — the tax payer’s pocket. If one were to include the 7 paramilitary organizations in totaling the cost in terms of maintenance and pensions, the figure will be altogether humungous. As it is HR upkeep costs are crowding out the outlays for hardware procurement.
The burgeoning problem has finally attracted the government’s attention. Except, the Modi regime has resorted to controversial steps by the Ministry of Defence — covered under the rubric of the civilianization of some 752 cantonment territorial parcels and military lands all over the country –as a means of drastically cutting the expenditure in upkeeping these vast tracts of land and landed-property owned by by the MOD and hitherto set aside for exclusive armed services’ use. This solution has already riled the military and increased the sources of tension between the military and civilian sections of society, and doesn’t address the fundamental problem of the government’s financial support for the military being skewed by the mounting HR expenses. The army has also proposed other means, such as eliminating the one-star Brigadier rank and equivalent from the military. Yes, but the savings will be minimal in payroll and pension costs in any case, but will sow a lot of confusion in the interface between time-grade promoted officers (to the Lieutenant Colonel rank) and colonels destined for higher ranks by selection. And, in any case, how will this new system jell considering a brigade is the army’s fighting unit of choice? Anything smaller being sub-optimal and anything bigger unwieldy.
Oh, sure, there are other decisions the Modi government can take expeditiously to streamline, rationalize, and drastically reduce defence expenditure by, for instance, integrating the training and logistics components of the army, air force and navy into joint Training and Logistics Commands under MOD (to avoid triplication of these capabilities and of funding at each unit level), which will save a whole lot of money. But anything integrated is shunned by the military and however desirable will not be obtained –witness the state of the realization of Chief of Defence Staff system. It has been provisionally vetoed by IAF. So the economies available by these means won’t happen, especially as Prime Minister Narendra Modi, while happily seeking votes from the large, country-wide, military Family for his OROP decision, has shown he lacks the political will to impose structurally and organizationally re-engineered systems for the bureaucracy and armed services to operate in.
So the only way out seems to be to rejig the manpower-heavy army’s strength without hurting its war-fighting capability. An obvious solution comes to mind that older generation officers may be partial to: Why not revert to the old five year colour (frontline regimental) service standard for the army? It will have cascading benefits for the country, besides relieving the stress on the state treasury.
India’s population is some 1,281,935,911; of the available youthful manpower of 616 million, 489.6 million are “fit for service” with 22.9 million annually reaching military service age of 18 years. The entrant-level jawan will have to be unmarried and with a high school-leaving certificate. The five year colour service norm will mean a year for training and battle inoculation and four years of active service, at the end of which an unmarried jawan cohort will pass out of service, still young but now experienced — some of them armed with marketable technical skills in telecommunications, machinery servicing and maintenance, etc. , and each equipped also with a fat remuneration package of couple of crores of rupees paid up-front, lump-sum, to ease their passage back into civilian life and with the financial wherewithal to find their way in the world in second careers lasting a lifetime.
The gains will be numerous, among them (1) a growingly disciplined citizenry, with the ex-armymen in the van, (2) a younger, physically stronger, more lithe and agile army, that will more readily be deployable in challenging tasks and expeditionary missions, etc. (3) a younger armed forces reserve for call-up in national emergencies, and (4) drastic reductions in the spend on pensions and post-retirement services.
At present the army is in the worst possible situation in every respect. With the 17-year colour service norm, the average trooper is in his 30s by the time of his release — too young to live a pensioned life, but too old to start out on a new career and to lift himself further. The country has then to sustain him for the rest of his life — for the next some 40 years or more, and his survivors for the rest of their lives, completely skewing the defence budget. Worse, it radically limits the resources the nation can make available for national security generally, but more importantly, for keeping the army and the other armed forces continually modernized and technologically updated.
The country, moreover, will not have to “double dip” by having government-owned banks give loans to the young for their entreprenurial ventures — as Modi boasted in Parliament in last Friday’s vote of no confidence. The jawan graduating with 5-year’s military service behind him will be well-equipped financially and age-wise to make it on his own.
If the paramilitary organizations were subjected to similar five or seven year frontline service norms, more Indian youth — short of compulsory national service — will be recycled and a huge dent made as regards unemployed or under-employed youth currently clogging up the economy. The demographic bomb, and not demographic dividend, is the country’s most severe existential threat.