The defence budget from Finance Minister Nirmala Sithamaram throws up several interesting insights. The key thing to look at are the capital budget allocations. The Army has received an increase of 16.23 per cent, the Navy, 10.96 per cent and the Air Force, 2.79 per cent. The capital budget is the clearest indication of what the government can fork out in the next financial year to modernisation, while paying for ongoing and new acquisitions.
The overall defence budget estimate of Rs 5.93 lakh crore is a marginal increase of 12.9% over last year. However, if we look at the big picture, the overall modernisation budget has seen a low increase – just 6.67% at Rs 1.62 lakh crore over last year’s allocation of Rs 1.52 lakh crore. The highest allocation is to the navy, perhaps a clear signal from the government that it recognises the Chinese threat clearly and wants to firm up its maritime presence.
Every year there is a notable concern about India’s defence budget. These concerns emanate from three principal issues for India this year.
The Three Expenditure Drivers
First, the continuing crisis on the Line of Actual Control (LAC) that India shares with China has pushed India’s military into an accelerated need for modernisation. This is also driven by the expansion of the Chinese navy into the Indian Ocean, besides its posturing in the South China Sea.
Second, the Russian invasion of Ukraine in February last year has re-written a lot of existing concepts on warfare. The use of technology has seen the Ukrainian forces put up a significant resistance against numerically superior Russian forces. It is also relevant to India because a majority of its military equipment continues to be Russian. Military planners in India have lessons to learn on optimal use of annual defence budgets, with evidence that cheaply available technology and innovation can easily turn the tide against a superior adversary.
Third, India has recognised that to be considered a credible regional military power, it has to play a significant role in the Indo-Pacific. This means that it has to have a credible Naval presence, which also needs a fleet of not just surface ships, but also submarines. In this regard, its project to acquire more modern submarines has been floundering for years and it is unlikely that the current budget or next year’s interim budget will be able to address this.
Modernisation Budgets
The Narendra Modi government has been sensitive to the needs of the Indian military and also tried to accelerate modernisation and indigenisation after the Galwan incident. It granted emergency purchase powers to the three armed services to acquire new armaments that can counter the growing threat from China. In May 2021, the then Army chief, General Mukund Naravane, had pointed out that the army had concluded contracts worth nearly Rs 21,000 crore, including emergency purchases to modernise the army.
However, emergency purchases are actually a symbol of the failure of modernisation. Any plan to modernise the military has to be a deliberate exercise where the country’s long term threats and political objectives are carefully mapped to its economic posture. This exercise also looks at big ticket acquisitions that make the military a viable fighting force for short-, mid- and long-term threats.
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Traditionally, the Indian Navy maintains a ratio of capital to revenue ratio of 60:40. This year, it is in luck with the ratio shifting to 65:35 with modernisation getting a higher than usual allocation. What the navy needs is more surface and underwater combat capabilities. Its submarine arm, which saw the induction of five new French Scorpene submarines, is waiting for the contracted sixth, and aims to get six more new boats. While the French have agreed to help Mazagon Dock Shipbuilders (MDL) retrofit the DRDO-developed Air Independent Propulsion (AIP) which will enhance Scorpene’s underwater endurance significantly, India needs at least three more similarly equipped conventional submarines. The balance three could be SSNs (nuclear-powered attack submarines), thus giving the navy a potent edge over its traditional adversaries.
Planning Arms Acquisitions
The Army, always manpower-heavy, has lesser capital allocation than the Navy in percentage terms. But it will have to do the bulk of the fighting against India’s traditional adversaries, besides also discharging its varied internal security duties. Recall that it had to rapidly insert nearly two divisions into the Ladakh sector post Galwan to dissuade any Chinese misadventure. The army thus has diverse requirements: helicopters, artillery guns, small arms, drones, communications and mobility. It is already in the process of getting American howitzers, indigenous artillery guns, and new rifles from US arms manufacturer Sig Sauer.
For the Air Force, the current allocation is not cause for cheer. It probably indicates that the government is not looking at adding further squadrons to its combat jet fleet. For now, the Air Force will have to be happy with two squadrons of the Rafale. But they need many more jets, since it is currently operating far below its sanctioned strength of 45 fighter squadrons. Perhaps, the way forward could be to do some course correction at Air Headquarters and push for a mix of fourth-generation heavyweight aircraft (like the Rafale) and lightweight (like the indigenous Tejas and the Swedish SAAB Gripen).
It has to be also noted that this year’s budget is the last full one for the current government. With general elections looming next year, it will be able to only pass an interim budget, leaving most major acquisition plans in a limbo.
Finally, all acquisitions have to be planned in context of not just India’s current challenges and ambitions, but also its long-term aspirations. As a young country and emerging economy, it will always need to have a credible deterrence on land, sea and air to protect its strategic interests. Acquisitions are also time-intensive, with margins for manufacture, induction, integration, training and optimal deployment. That always takes time and most militaries will always wish for the sooner the better.
Vice Admiral Shekhar Sinha is a former FOC-in-C of Western Naval Command and CIDS. Saikat Datta is CEO, and both of them are co-founders of DeepStrat, a New Delhi-based think tank and strategic consultancy. Views are personal and do not represent the stand of this publication.
