A bigger, not better, defence budget

News: Even as the total allocation for defence under the current budget has increased, it has fallen as a percentage of GDP.

About the recent budget allocation in the defence sector

The government allocated Rs 5.25 trillion to the Ministry of Defence, out of the total government outlay of Rs 39.45 trillion. This accounts for 13.31% of total government spending.

Navy: Among these, the Navy received a significant rise in its capital allocation. The navy’s capital budget has been enhanced by about 43 % in comparison to FY 2021-22 to FY 2022-23. It will be used for the acquisition of new platforms, like six air-independent propulsion (AIP), a second indigenous aircraft carrier (IAC-2), 57 twin-engine deck-based fighters (TEDBFs), etc.

Coastal Security: The capital budget of the Indian Coast Guard has been enhanced by over 60% in FY 2022-23.

Border Roads Organisation (BRO): The capital budget of the BRO has been augmented by 40% from the current year to FY 2022-23.

Defence Research & Development Organisation (DRDO):  The DRDO’s capital budget allocation is up by 5.3%. This denotes a limited boost to indigenous R&D projects.

Why the defence allocation under Budget 2022-23 is not enough?

First, The present allocation is the lowest in percentage terms since the 1950s. Also, as a percentage of GDP, the defence allocation amounted to just 2.03%. This is a reason of concern, especially in times when China claims many parts of Indian territory as their own.

Second, India is focusing on military modernisation and border infrastructure development for its national security. There has been a 76% rise in the defence capital outlay from 2013-14 to 2022-23. Although it seems like a healthy growth rate, it actually amounts to less than 5 %, compounded annually.

Third, seven new defence public sector undertakings(DPSUs) were incorporated under the defence ministry after the dissolution of the Ordnance Factory Board (OFB). They require a huge sum for their planned modernisation.

Source: This post is based on the article “A bigger, not better, defence budget” published in Business Standard on 4th January 2022.