Low defence budgets and poor force planning: Why isn’t India pursuing joint R&D with military allies?

The hike is a meagre one and India’s defence budget remains one of the lowest in percentage terms.

A vote on account is an interim budget that could be an indication of things to come when the actual budget is passed late this year, post the general elections. As things stand, the interim budget presented by Finance Minister Nirmala Sitharaman has hiked the defence outlay, up from Rs 5.94 lakh crore to Rs 6.2 lakh crore.

The hike is a meagre one and India’s defence budget remains one of the lowest in percentage terms, hovering around 2 percent. A large chunk of the budget goes towards paying salaries and pensions, which keep growing every year. Keeping India’s current threat perceptions in mind, it may be a good budget to keep a check on Pakistan, but comes nowhere close to tackling a growing threat from India’s other neighbour, China.

Some of this is evident from the capital outlay of the defence budget, which is the portion used for modernisation of the military. The budget estimate for 2022-23 was Rs 1,52,369 crore, which was revised to Rs 1,50,000 crore. In 2023-24, the budget estimate was Rs 1,62,600 crore.

This shows that not only is the capital outlay low, it is also failing to spend the money allocated. That means, there is also an issue with how India modernises its military, which is a complex exercise involving long-term perspective planning, and involves a host of factors such as economic interests and projected growth, long and mid-term threats, force planning and a road map to fight future wars.

In a recent episode of the podcast on ‘Everything is Everything” that focussed on the Indian military, economist Ajay Shah makes an interesting point on the intersection of economics, geopolitics and military modernisation. Shah points out the deep linkages between developing modern militaries and building up a common defence with like-minded allies.

Traditional western military alliances such as NATO play a key role in development and modernisation where projects are undertaken jointly, ensuring subsidy of development costs as well as enough buyers to keep the development project economically viable.