Under the Narendra Modi-led government, we have seen a refreshingly bold departure from the past when governments seemed unwilling to deal with two defence-related problems: the pension issue, and the more debilitating matter of reliance on foreign arms
May 26 marks eight years since Narendra Modi became Prime Minister of India,
and since 2014 a Bharatiya Janata Party (BJP)-led National Democratic Alliance
(NDA) government has been in power at the Centre. Where defence and national
security are concerned, the people of India have been told that this government
is sufficiently alert and effective in protecting national interests and
The government has proved particularly adept in wrapping itself around the
flag and associating with the military. Unwittingly though while resolving some
longstanding issues, other equally baffling problems have been created.
The government has delivered, for instance, on its ‘One Rank, One Pension’
promise — a nettlesome issue previous governments kicked down the road for want
of financial resources. In the 2022 defence budget of Rs 5.25 lakh-crore, the
Rs 1.19 lakh-crore pensions bill combined with the outgo on payroll expenses
exceeds the spend on force modernisation and maintenance costs. Should this
trend continue, India will soon be able to afford either an adequately sized
force, or the weapons to equip it supported by minimal stocks of spares and
ammo — not both.
It may be recalled that based on the projected economic growth rate, and
assumption of annualised 10 percent increase the defence budget was expected to
reach the 3 percent GDP level recommended by the 11th Finance Commission by
2004. In reality, the defence budget has stagnated at the 2-plus percent of GDP
level, and budgetary increases have barely kept pace with inflation. The
result: No buck, no bang! Still the armed services have managed somehow to
contend with live, disputed, borders with China and Pakistan. How well? Don’t
There is a simple two-pronged solution that has not so far occurred to the Government of India. First, to match the military manpower cuts, the strength of 400,000 ‘defence civilians’ employed by the Ministry of Defence (MOD) should be slashed by half. India needs DRDO scientists, engineers, and the like, but can do without the horde of peons, clerks, stenographers, and section officers clogging up the MOD and other government offices everywhere. Official business conducted through a safeguarded computer network will eliminate the hopeless files-system and the endless numbers of babus associated with it, and coffee/tea machines can replace peons, and improve the MOD’s dismal operating efficiency.
Second, the defence civilian pensions should be shifted to the Government of
India administration pensions account, thereby, at a stroke, freeing up roughly
80 percent of the defence pensions bill monopolised by retired defence
civilians. It is monies the armed services can utilise to sharpen their
Through these two steps the Prime Minister can be credited for, (1)
modernising the Indian military, making it razor-sharp, without raising the
defence allocation, (2) digitising and de-bureaucratising the MOD (as a test
bed for upgrading the government’s conduct of business), and; (3) removing the
demeaning caste-like hierarchy featuring low-grade workers.
The other major change in the defence sphere is the drive to make India
self-reliant in armaments. Again, Modi had the right idea with his aatmnirbharta policy.
Except, in the years since he mooted it, there has been more confusion and
drift than genuine progress; a situation not improved by a series of updated
defence procurement procedure documents issued by the MOD that regularly trip
up Defence Minister Rajnath Singh and ministry officials as much as they do the
military brass and public and private sector defence industrial companies.
No one is quite sure what aatmnirbharta means. Do foreign
companies producing dated military products (F-16 fighter plane, say) fit the
guidelines? But doesn’t that undercut the objective? To compound the confusion,
Singh in the past year has released lists of military goods the armed services
can no longer import, including major weapons systems such as helicopters,
artillery guns, warships, and submarines. It is supposed to encourage
in-country research, design, development and production of advanced weaponry,
and support systems, save the country tens of billions of dollars in hard
currency, seed a vibrant defence industrial ecosystem to meet the armed
services’ equipment needs, to generate export revenues, and have a multiplier
effect on the rest of the economy.
Singh’s negative lists, prima facie, suggest the government wants results
fast, to obtain which it is prepared to throw all concerned parties into deep
water, and hope they learn to swim. This, incidentally, is the correct approach
to shock the armed services, the MOD, and defence public sector units,
habituated to weapons systems screw-drivered from imported completely knocked
down (CKD) and semi-knocked down (SKD) kits, out of their licensed manufacture
Denied the import option, the military will have to take ownership of
indigenous weapons projects and, crucially, prepare to fight with
Indian-designed armaments that may not initially meet the foreign weapons
standard. It is an unavoidable stage in making aatmnirbharta work.
The Modi years to-date have seen a refreshingly bold departure from the past
when the government seemed unwilling to deal with the two main tasks at hand,
namely, the pensions issue that had the entire military community up in arms,
and the more debilitating matter of reliance on foreign arms.
The solution for the first problem was enabled by the government’s readiness
to sequester the necessary funds and take a financial hit, and for the second,
was the decision to kickstart the Indian defence industrial economy by closing
off the imports channel, and incentivising the public sector and private sector
companies with promise of full order books. India may finally be on the way,
hiccups apart, to consolidating its military power.
Published May 25, 2022 as part of a series of articles assessing 8 years of the Modi government in Moneycontrol.com, at https://www.moneycontrol.com/news/opinion/modi-govt-8-two-vexing-defence-problems-the-narendra-modi-government-has-dealt-with-8572091.html
Email from Commodore Anil Jai Singh (Retd):
Wed, 25 May at 1:17 pm
I always enjoy reading your analysis on various issues related to India’s defence and security. One may not agree with everything you write and I am sure you don’t expect everybody to either but it is certainly thought provoking and generates debate and discussion.
I think it is time that this bogey of defence pensions being a strain on the national exchequer and its impact on the defence budget and the country’s defence preparedness needs to be laid to rest.
How is it that only defence pensions impact the national economy whereas the pensions paid to the India’s large and ungainly bureaucracy, the police , the paramilitary forces, the huge railways work force, the diplomats , the academics (teachers and professors) , the scientists and a whole lot of other departments do not and are never questioned. Does the railways pension bill affect the improvement of the country’s rail services or does the pension paid to academics adversely impact education or that paid to diplomats inhibit India’s engagement with the world. If indeed it does, ot is never mentioned and if it doesn’t then where does that money come from? However, defence pensions affect defence preparedness and OROP is a kick on the stomach of poor farmers ( isn’t that what Mr Modi had said publicly ?)whereas the lifelong pension to every politician for having been in office for even a day is not.
I am also surprised by your assumption that Mr Modi has addressed the long outstanding OROP issue because he has done nothing of the kind. OROP has fallen far short of what it was meant to be and the MoD bureaucracy has ensured that even that is not implemented. Therefore Mr. Modi’s grand announcement of OROP from the ramparts of the Red Fort flanked by the national flag was yet another example of what we have seen on various issues over the years.
You have rightly highlighted that the number of defence civilians drawing pensions from the defence budget are in a minority vis-a-vis the uniformed pensioners but draw a larger chunk of the pension amount. Their pension should be delinked from the defense budget.
On the issues of aatmnirbhar Bharat, it is indeed a laudable initiative . Our import dependence is a major strategic vulnerability. However, the devil will lie in the implementation . We do not even have an enabling policy framework in place yet to encourage industry to make the necessary investment to ensure that we can go aatmnirdbhar without compromising our defence preparedness. Seven decades of inertia will take a lot of effort to overcome. Perhaps this is that transformational moment we have been waiting for.
AS usual a well analyzed article by Prof Bharat Karnad. The aspect of moving the pension of the defence civilian pensions to the Government of India administration pensions account is indeed a great thought and needs to be deliberated upon by the GoI. Regarding pensions of the other organs not being talked about is understandable since the introduction of the NPS from 2004, and is a non issue.
As far as self reliance is concerned, yes, we all need to act on this, not only in words but also in deeds. Sadly, such competence and capabilities takes time to build, as Prof Karnad has brought out earlier in his other articles.
We sincerely hope that this article is not only read but also acted upon by the decision makers!
All that you say is true and your point about civilian MoD pensions is enlightening. However, it seems like many of the policy change announcements are being lethargically executed. The problem in India is always execution. So we will have to see how all the announced changes actually impact defence preparedness. The good thing is that there is some hope for change. But the slow grind of India’s inertia is also palpable. Like you have mentioned in the past – only a mission mode approach will work.
While your second point about self reliance in defence production is a welcome change, I am afraid the government will continue to act as the employer of last resort.
You may have seen reports of protests in the cow belt states that the defence recruitment drives have stopped since 2018 – the freeze continues with the excuse of Covid.
Lakhs of these impatient youth have since turned over age and have been demanding relaxation to the norms. Its a powder keg waiting to explode.
In short, India necessarily needs live borders to provide employment to millions of these hopeful youth – since the economy is in doldrums, recruitment has been stopped in other government departments as well – profitable PSUs, Banks, railways ..and with no other recourse for these youth.
Modi can tax the likes of us to death for defence pensions but cannot afford a dent to his carefully crafted image amongst the rural youth – many of whom have been brain washed to necessarily treat all our neighbours as enemies, defend the government’s muscular moves on prime time and are perhaps the biggest vote bank.
@Ram- Excellent analysis especially the following;
“India necessarily needs live borders to provide employment to millions of these hopeful youth.”
“rural youth – many of whom have been brain washed to necessarily treat all our neighbours as enemies, defend the government’s muscular moves on prime time”
That’s why the rhetoric of claiming POK and Aksai Chin will continue without any action on the ground.
Government’s so called muscular moves are nothing but just cacophony on TV channel debates.
Modi should talk to Putin and send all these millions of unemployed youth wishing to join the army to Russia.
They can join the Russian army and Putin can embark on a mission to reclaim the whole of erstwhile USSR and merge it with Russia.
Empoyment generation is not a bad thing!
@Ashok- Indeed, India has a surplus population. This so called ‘demographic dividend’ can be optimized.
Indian government should ask both Ukraine as well as Russia to open up recruitment centers in India. Loads of Indian youth will get employment this way.
France has the Legionnaires army unit, wherein any non French national between the age of 18-45 can go and join provided he clears the entrance test.
Russia and Ukraine have been fighting now for more than three months. Both of them have suffered heavy casualties amongst the rank of their armed forces.
By implementing the aforesaid step they can replenish their dwindling manpower while providing jobs to large number of unemployed in India. Win-win situation for everyone involved.
Off topic- sir do u think yasin malik’s life imprisonment increases the chances of “IC814” 2.0 .
Kunal@ — To pull off IC 814 involved an intense ISI role. Pakistan and Pakistan army are in no position to repeat this event. They have their heads just above water. Another such incident and they’ll go under, financially and otherwise.
Email from Lt Gen Vinod Bhatia (Retd), former Director General, Military Operations
Thu, 26 May at 10:02 am
Thanks, very well brought out.
The strength of Civilian employees paid out of the defence budget was over 600,000 when we concluded the Sheketkar committee in dec 2016.
The OFB has since been corporatised thus a saving of 75,000 people. ( Though they have a generous allocation to see them through the next two years without any major earnings.) The Army base workshop civilians are migrating to GOCO. That still leaves close to 500,000 civilian employees belonging to nearly 27 organisations under the MoD, paid from defence Budget. The real Tail
You spoke too early about the bloated numbers in the army, our worst fears have come true.
Professor, here is an article written by a retired IAF officer on HAL, ADA and DRDO capabilities to manufacture and design the indigenous LCA and the Kaveri engine. This is the sad but true state of affairs in the Indian defence industry. As long as 80% of the defence industry output in India is from public sector companies, India will never develop quality weapon systems on time and will forever lag in defence preparedness.
Socialism does not work. Even Chinese SOEs, known for their formidable execution capabilities, are only good for scaling cheaply, but not quality. The Indian navaratnas are a joke and a far cry from what India really needs. Calling them navaratnas is a joke. It is high time there is public pressure on the PSUs to reform or get privatised. The Government cannot reform PSUs. Only the harsh competitive forces of the market can make them efficient.
A well written article regarding the concerned issues, something you’ve wanted happening for ages, especially the defence import reductions and finally complete self reliance in defence related items. Hopefully the present govt will take these steps to their logical conclusion