Decluttering the defence budget

Source: The post is based on an article “Decluttering the defence budget” published in Business Standard on 3^rd February 2023.

Syllabus: GS 3 – Government Budgeting

Relevance: Budget 2023-24 for the defence

News: The article discusses the shortcomings of the Budget 2023-24 in the defence sector.

What are the shortcomings with the budget in the defence sector?

Decline in budgetary outlay: The defence budget, including pensions to veterans, has for the first time fallen to below two percent of the GDP.

The defence budget showed a rise of 13 percent over the previous year’s budget. However, this rise in the defence budget is only 1.5 percent when compared to the revised estimates for the last year.

Moreover, capital outlay for modernisation and infrastructure development increased to 57 per cent since 2019-20. However, compared to last year’s capital budget allocations, this year’s capex allocation represents a raise of barely 6 percent.

This is inadequate because of prevailing macro-fiscal environment of high inflation and a falling rupee.

Moreover, the defence capital allocations form a part of the capital investment outlay in the Union Budget.

While the capital investment outlay has risen for the third year in a row by 33 percent, the rise in defence capital allocations is not upto the mark.

Inadequate distribution of the budget amongst the three services: The distribution of the capex fund amongst the three services (Airforce, Army, Navy) is not uniform. The allocations would have been made on the basis of roles assigned to each service by National Security Strategy (NSS).

NSS objectives would have made budget allocations more effective because that would determine the kind of warships, equipment, tanks, missiles, etc. needed for the three services.

However, the current budget has allocated non-uniform fund to the three services without keeping in mind these objectives.

Inadequate allocation of the budget to other organization of the defence: The budget allocations for the coast guard, the Jammu & Kashmir Light Infantry and for the Border Roads Organisation is not as expected. These organizations form a part of the defence ministry budget.

Therefore, the budget allocations would have been made according to their role and functions. However, this has not been done.

Hence, it would be better to allow those organizations to have their own demand for grant or to consolidate their allocations along with the consolidation of Defence R&D Organisation budget.