Defence in a financially strained time

INDIA BUD 3-1612176790214
[Finance Minister Nirmala Seetharaman delivering the budget ]

Despite hostilities last summer and the prevailing tense situation on the disputed border — ‘Line of Actual Control’ — with China, Indian defence budget has actually not increased in real terms from 2018-2019! The defence allocation of Rs  4.71 lakh crore three years ago amounted to about US$65 billion which, incidentally, is the current US$ value of the total defence budget that has nominally increased to Rs 4.78 lakh crore announced yesterday by Finance Minister Nirmala Seetharaman in Parliament. In other words, the defence spend, for all intents and purposes, is both relatively small and static.

This reckoning in hard currency matters because the Indian armed forces are so completely dependent on imports for almost everything military, even slight force augmentation or filling of “voids” entails heavy US dollar outflow. Such are the straitened circumstances the country finds itself in. In a time of negative economic growth, the country is unable to afford even a reasonable level of security. This is showcased by that little statistic of defence budget accounting for only 1.6% of a slowing GDP growth.

Much has been made by Defence Minister Rajnath Singh about the Rs 1.35 lakh crore or US$18.5 billion (at current US$ value) being set aside for capital expenditure by the armed services. A lot of this money, alas, will not go into shoring up the country’s fighting capability against the PLA on or across the length of the LAC, but is committed expenditure related to the armed services’ pet procurement programmes — buying T-90 tanks, 114 more aircraft that the IAF will try and ensure are additional Rafales, etc.

So come April when snow melts, the Chinese will again begin stomping on Indian toes knowing fully well the Indian military can do damned little about it other than to hold on tenuously to positions they are in, leaving everything else to chance! I mean, how useful is it to bulk up the Rafale and T-90 fleets when the need is for more winter-equipped Special Forces to retake Depsang in the immediate here and now when the foul weather ability of the PLA to transport and maintain a large force is limited, a constraint that will be instantly removed once spring and summer come around?

More importantly, because this latter aspect — retaking Depsang — is not an operational priority these earmarked funds will do little to alleviate the main problem at hand. Namely, the reality of a large piece of Indian territory — some 1000 sq kms in size, in Sub-sector North northwestwards of the Y-junction on the Depsang remaining securely in Chinese custody. The longer this PLA occupation is unchallenged and not forcibly reversed, the more confident will Beijing feel in legally claiming it as part of Tibet and, control-wise, bring it under PLA’s southern sector command.

But to revert to the US$ 18.5 billion capital budget in this fiscal, a goodly sum has already been spent in the usual helter-skelter fashion reflecting desperation — the normal anytime genuine military hostilities loom. In the period July-December 2020, Indian army teams fanned out all over the world to secure at improbably high prices war materiel worth US$2 billion to replenish its war wastage reserve (in terms of critical spares) and war stock of ammunition and artillery shells. Indeed, supplier companies in France, the US, Russia, etc have been licking their chops eyeing the profit in store and stocking up since last summer, certain that India will make a run on their inventories when they anticipated extracting a kingly ransom from Delhi. This they have done. Not to waste an opportunity of the national wallet being opened, the air force indented for 20-odd MiG-29 air defence aircraft and a dozen Su-30MKI multi-role aircraft from Russia for roughly US$4 billion to bolster its force strength. The trouble is neither set of actions will prospectively blunt the edge the PLA and PLAAF can bring to bear in China’s Western Theatre Command when tensions again begin to rise.

True, Indian defence budgeting has always involved juggling with several balls in the air — partially funding a foreign acquisition here, another procurement there, in a patchwork that does little to comprehensively enhance India’s security or its ability to fight sustained, long duration, wars. Reason why, it is the military leaders who voice the need for the government to seek a diplomatic solution with China! Such is the perfectly awful state of strategizing and of resource planning in the PMO and in the Defence Ministry.

Atm nirbharta is, of course, reduced to a joke. It boggles my mind when Prime Minister Narendra Modi, Rajnath Singh, on down equate license manufacture with self-sufficiency in arms!! The obligatory noises about self-reliance apart, emergency buys such as the ones India has so far gone in for, only exacerbate the situation. All kinds of planning predicates get ditched, with the impromtu buys abroad especially at premium rates being the chief skewing factor. In the event, the demands for defence expenditures to reach the 2.5% of GDP, and 3% of GDP suggested by a past Finance Commission while rife, are simply unrealizeable. Especially in a COVID-devastated economy that has formally left India poorer than Bangladesh in terms of per capita GDP!

The Indian government is economically reduced to firefighting mode, trying to stretch, the best it can, the too few resources to cover too many domestic demands. It is a political context in which defence will always find itself deprived.

About Bharat Karnad

Senior Fellow in National Security Studies at the Centre for Policy Research, New Delhi, he was Member of the (1st) National Security Advisory Board and the Nuclear Doctrine-drafting Group, and author, among other books of, 'Nuclear Weapons and Indian Security: The Realist Foundations of Strategy', 'India's Nuclear Policy' and most recently, 'Why India is Not a Great Power (Yet)'. Educated at the University of California (undergrad and grad), he was Visiting Scholar at Princeton University, University of Pennsylvania, the Shanghai Institutes of International Studies, and Henry L. Stimson Center, Washington, DC.
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35 Responses to Defence in a financially strained time

  1. Gaurav Tyagi says:

    The Indian territory, approximately 1000 sq kms of size, in the Sub-sector northwestwards of the Y-junction on the Depsang is as good as gone from India’s control.

    India will never initiate any military action to claim either the so called POK from Pakistan or Aksai Chin from China.

    Political statements claiming to do the aforesaid are just meant for chest puffing public consumption.

    Pakistan also will never commence any major hostilities at the border with India. The current model of fear and hate mongering against Muslims in India and Hindus in Pakistan suits the establishment of both India and Pakistan.

    China inspite of all its boasting hasn’t been able to reclaim Taiwan till now. They had a golden opportunity when Trump lost the US elections in the first week of November 2020. Biden didn’t assume Presidency till January 20th 2021.

    It was an excellent window for the Chinese to annex Taiwan by force. U.S army generals would definitely have refused to obey the order of an outgoing President (Trump) even if Trump wanted U.S to interfere militarily in such a scenario.

    Taiwan will continue to exist as an independent nation. LAC will not see any more military action. Status quo will prevail there.

    Chinese have tested the waters and made their point by exposing Modi’s hollowness and fear globally. They won’t pursue the issue further.

    • Ram says:

      @Gaurav Tyagi

      “China in spite of all its boasting hasn’t been able to reclaim Taiwan till now”

      I would argue otherwise:

      – Why should China do the obvious?
      – By keeping the pot boiling, isn’t it bleeding the US military and its allies in Asia-Pacific?
      – By exploiting its historical claims of the hypothetical nine-dash line in the SCS and ECS, hasn’t it established its supremacy in Asia and about to dethrone the US in the near future?
      – With its strategic restraint, hasn’t it won the war without an actual fight (following Deng Xiaoping’s advice to “Hide your strength and bide your time”)?
      – Why would it want to disturb the apple cart when its economy is still heavily dependent on international trade?

      The mere mention of PLA and its projected capabilities is enough to send a message to the world that it means business.

      Back home, team Modi/RSS is busy whipping up minorities/Kashmir/Pakistan, playing to the gallery to fulfill its long cherished dream since independence of establishing a “Hindu Rashtra”. Modern age strategic matters such as the unresolved borders with giant China, not so friendly relations with our neighbors due to religious animosity, matters involving sovereignty and strategic autonomy etc…are quite insignificant and far down their list of priorities. On the contrary, an occasional Ladakh or Doklam like disturbance takes the sheen off their noble accomplishments being pursued in this regard.

      Thanks to his centralized style of governance, inexperience of the entire cabinet (all are newbies at the Centre) and regulatory overkill, he’s relegated the country to an economic backwater with records levels of poverty, distress and unemployment. Not sure if such metrics qualify us to take on a super power like China.

      When you say –

      “Chinese have tested the waters and made their point by exposing Modi’s hollowness and fear globally”

      Given team Modi’s highly enviable vision for a country already overwhelmed with other pressing matters, should this surprise us at all?

      • Gaurav Tyagi says:

        @Ram, my point is that all these neighbors; India, Pakistan as well as China will maintain the status quo.

        China will never forcefully take Taiwan nor will Taiwan ever willingly go and merge with China.

        POK & IOK will remain where they are.

        Fear of the devil is bigger than the devil itself.

  2. PRATIK KUMAR says:

    ‘The trouble is neither set of actions will prospectively blunt the edge the PLA and PLAFF will bring………tensions again begin to rise’ – Sir what do you mean by this???

    Are you telling about the edge that PLAAF maintains over IAF in terms of bomber aircrafts (where H6 bomber armed with CJ 20 cruise missiles can take out any IAF assets from a larger distances which can’t be intercepted by IAF)??? If this is so why IAF boasts about weapons carrying advantage it has over PLAFF??

  3. Sankar says:

    Once again this is an exceptionally well analyzed insight in the malaise of the Indian State and rotten incompetence of the political leaders that endangers Indian sovereignty. Thank you, especially for your eyes on Depsang.

  4. Ram says:

    ‘Fear of the devil is bigger than the devil itself.’

    Shouldn’t we intospect why we aren’t considered that Devil, at least in the immediate neighborhood?

    Latest example why our neighbors really don’t give a damn to our sensitivities.

  5. Tony says:

    My blood pressure goes up everytime I read han is on our land all the while chai and biscuit are behaving like Harley G . 56 inch not withstanding.

  6. Gaurav Tyagi says:

    @Ram, a compilation of few statements in the comments section of the news link posted will provide an answer to the question posted by you;

    Where are the half chaddis now? Jaishankar has failed with regards to Pakistan, China and now Lanka. Modi government is a big failure.

    This is bound to happen, when RSS is ruling the country. They can only persecute their own citizens.They don’t have wisdom & guts to make neighbours friendly or punish them. Are we still giving them free Vaccines?

    Once again we hear the magic word “ADANI”. The successful outcome of the much hyped vaccine diplomacy. Where is Jaishankar and his big mouth now?

    As always, we are monitoring the developments. We are failing miserably in our foreign policy. Jaishankar should be asked to take a walk. He has failed at all fronts.

    Poor influence on our neighbours make us a mockery in front of everyone.

    We shall do ‘Kadii Ninda’ of this.


    What should India do at Depsang plains? More than “what”, ” How” should India do it? And 🙏 no general statements/suggestions/approach.

  8. vivek says:

    although not related to defense, any idea if there is any motive for the US and its Companies’ backend support for the anti-farm Law movement in india?

    • One can speculate that such support is to ensure Indian agriculture does not become internationally competitive
      and become a problem for the highly subsidised American farmer.

  9. Amandeep Singh says:

    A Military coup in neighbouring Burma and India has not said a word has it? I think it is a good opportunity to show regional leadership. What are your thoughts Mr.Karnad?

    • @aman — This is a nettlesome problem. There’ll be a heavy price to pay if Delhi sides with Aung San Suu Kyi because it will drive the Myanmarese generals more fully into China’s embrace.

  10. andy says:

    Seemingly the Depsang plains has been given up as a lost cause. Some of the statements emanating from various sources suggest that this is a problem that “predates” the current crises and therefore cannot be blamed on the current dispensation. Does that mean that since the crisis is old it doesn’t infringe on Indian sovereignty? And isn’t it only fitting that any and every way should be explored to regain lost territory?

    The Chinese are trying to regain by whatever means ,territory all along their peripheries from Senkaku, to SCS and Taiwan, that their ancestors had controlled in the distant past. It doesn’t matter to them that they have no locus standii in Ladakh, because Tibet or ladakh was never part of china. In fact General Zorawar Singh had annexed territories right up to the mansarover lake and penetrated quiet a distance north of the Karakoram pass,all these areas are no longer with India. Just because Depsang was taken over a few years ago is it right to wash our hands off it?

    The military scrambling for arms and munitions to bolster fighting capacity when the enemy is at the gate is not a new scenario. But the most mind boggling one is the purchase of 73000 odd Sig Sauer assault rifles from the USA. This is a clear reflection of ad hoc ism in Indian military procurement and explains why there’s no standardization of weapon systems. The most elementary infantry item is an assault rifle ,here we have units equipped with the Insas firing a 5.56 *45mm ,Sig Sauer with 7.62*51mm and AK 47 knock offs with 7.62*39mm rounds,three different rifles with three different calibres of ammo. Supplying the right calibre ammo to the different units is a nightmare in the best of times, but if heavy fighting breaks out and supplies are mixed up then one can well imagine a situation in which the Insas round reaches a unit equipped with Sig Sauer rifles and the AK 47rounds reaching a unit armed with the Insas rifle. I mean how difficult is it to standardized an assault rifle for Gods sake?Until this ad hoc ism is sorted out and quality indegenous arms are manufactured, there seems to be little hope of any giving up on arms imports

    • Yea, some years ago I posted my op-ed in Hindustan Times regarding the army’s infantry weapon mess generally along the lines you have articulated it. The Indian military is in a downward spiral with no expertise in the govt to pull it out.

  11. By email from Joydeep Sircar at
    Wed, 3 Feb at 10:41 pm
    My dear Bharat,
    Don’t you think drone technology offers lndia a wonderful opportunity to bypass conventional high-tech, in which we are poor? For example high-thrust jet engines and stealth? As it is drones are making a lot of our conventional weaponry, particularly our armored forces, look very vulnerable. We need to develop anti-drone technology like severance of control link , EMP frying of circuitry and laser weaponry. This is a new field of warfare in which we are capable of matching the first movers, and costs are not prohibitive.

    There is no point weeping over Depsang, since we have not uprooted the Y junction block by a sudden paratroop strike or stealthy ground insertion. In Ladakh it is better to delineate a continuous line of defensible ground positions and hold these physically. All positions left vacant on the basis of any understanding, however solemn, will be lost. No point saying “but we have been going upto such-and-such patrol point for so long”, the Chinese wont listen, and nor will anyone else.

    By now you must have understood that the govt dithers in the face of challenges and is unable to take quick, hard decisions. They missed a golden chance of uprooting Tikait and co. on 28th Jan evening because of the failure of nerve of our portly Home Minister, a good political operator but a poltroon. ln this weak decision-making environment, it is necessary to choose excellent field commanders (not those who oiled their way up) and give them a free hand to respond strongly to any challenge without referring to superiors. Think Sagat Singh. Hopefully service in the forces will counter their propensity to dither!


    • @Joydeep — Have mentioned this in earlier writings and posts, but after surveying the state-of-art and the LCA projectjust then initiated, I advocated in 1986 that India bypass the manned aircraft stage altogether and get inot developing unmanned, remotely-controlled, aerial vehicles configured for A2A and A2G missions. It was published as a 2-part article in the Illustrated Weekly edited by Khuswsant Singh. This bit of forward look is what I am still most proud of.
      Sagat is very much on my mind and wish we had one in-charge of Ladakh sector, He is among the exemplars I will be harking on in my next book that I am writing.

  12. SHANAL SHEKHAR says:

    I saw one of your reply regarding Mayanmar coup. Don’t you think even Mayanmar military is cautious of Chinese given China’s support for various ethnic militia like KIO, Taang militants, ARSA, AA etc. Myanmar army would like to keep it’s options open and not heavily incline one way.

  13. V.Ganesh says:

    @BharatKarnad Is the RFP for 114 fighter jets a farce and the MMRCA 2.0 a pre-decided contest with the Dassault Rafale as the only winner?

  14. V.Ganesh says:

    @BharatKarnad Do you mean to say that the Indian Navy has already decided to buy the Boeing F/A-18E/F SuperHornet even before a RFP and placed order for it? Is that what you mean by indented?

    • Yes, asked for 50-52 F-18s some time back.

      • V.Ganesh says:

        @BharatKarnad Thank you for telling me that. Is the Indian Navy reducing its requirement from the original 57 to 52 also a way of the Government of India [GOI] wanting to keep Hindustan Aeronautics Limited [HAL] in business in order to get votes, win elections and bring Modi’s Make In India because Mahindra is partnering with Boeing and HAL to make them? When can the Indian Navy expect to start receiving the first Boeing F/A-18E/F SuperHornet?

      • Or, may be the F-18 number is 52-56. The deal has not been signed — no money.

  15. V.Ganesh says:

    @BharatKarnad You say like in the Trump administration, in the Biden administration, the push on India will be to buy the Lockheed Martin F-21. Then, why would Boeing ask and get permission from the US government to sell the Boeing F-15 EX Advanced Eagle in the upcoming MMRCA 2.0? The USA is a capitalist nation and why would they allow two companies of theirs in a contest if only one of them is going to win?

  16. V.Ganesh says:

    @BharatKarnad Since the beginning of the 2000s, India has purchased lot of US military hardware making the US one of India’s top military hardware suppliers along with Russia, Israel and France. The Government of India [GOI] knows the US is not averse to imposing sanctions as per its whims and fancies. So, do all of India’s US-origin military hardware have some kind of safeguard to keep them working in case the US imposes sanctions again?

  17. V.Ganesh says:

    @BharatKarnad Apart from getting business, earning money and interoperability, what reason would be there for the previous Trump administration and its successor Biden administration to push India to buy the Lockheed Martin F-21 for the Indian Air Force [IAF]? When the Pakistan Air Force [PAF] bought the Lockheed Martin F-16 in 1983, the Indian Air Force [IAF] to counter it bought the MiG-29. So, why this push after 37 years?

  18. Mandar Karnik says:

    Sir an excellent article, however top down OFB, DRDO, HAL indigenization has been largely a failure every time a foreign alternative is available. This suggests that corruption is an issue in weapon imports. Unless and until Govt brings up Indian industry to freely bid for defence projects and Govt favours them we will always be lacking.

    The industry needs a minimum of 5-10 years to grow to the technological level with foreign alliances. Once the industry grows and becomes self sustaining there wont be a need for foreign imports.

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