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The Rediff Special/Admiral J G Nadkarni (retired)

Defence Budget Blues

Now that the uncertainty about the formation and the survival of the new government is over, the next item on the agenda will be the presentation of the annual Budget. As far as the defence budget is concerned, each year New Delhi goes through the same ritual. A few incomprehensible figures are totted out which mean nothing to the layman. The finance minister makes the usual statement that money will always be found for the country's defence. A few speeches are made and the Budget is passed without murmur. For the past two or three years even the formality of discussing the Defence Budget has been done away with.

The Indian Defence Budget must surely be one of the most opaque documents placed before Parliament. The United States annual military budget runs into 14 thick volumes. It tells you everything from how much money will be spent on building the next few aircraft carriers to what the chief of the naval operation's gardener will be paid next year. The Indian military budget comprises a few pages which tell you next to nothing. The Indian defence establishment firmly believes in the principle of "need not to know."

Unfortunately, the Indian taxpayer is both apathetic and ignorant. He has never grudged a single rupee of defence expenditure in the past. He is happy with the defence minister's and the service chiefs's annual statements about "giving them a fitting reply" and "not an inch of territory," although he has a few moments of doubt when a Bofors scandal erupts.

For a country which spends nearly Rs 300 billion on its defence annually, little efforts is made to question the figures or to indulge in a meaningful debate about our defence expenditure. And yet there are many disturbing aspects about India's Defence Budget which need to be nationally debated.

On the whole, the serviceman has always bemoaned the shrinking Defence Budget, the resultant deterioration in men and material, and made an emotional appeal for at least a restoration if not a downright increase in defence appropriations. However reluctantly, one has to admit that the more sensible writing on defence expenditure has always come from knowledgeable civilians. For one thing, not being part of the defence establishment, they can take an unemotional and detached view of the issue. Secondly, being a little more scholarly, the civilian normally supports his writing with in- depth research, data and statistics.

By and large the civilian economic experts have been warning us about the runaway increases in the Defence Budgets and its deleterious effect on the national economy. For years, servicemen have pooh-poohed their pessimistic predictions. The time has now come to face reality.

In 1998-99 the Indian defence establishment will set a record of sorts by exceeding Rs 300 billion in defence expenditure. After debt repayments and subsidies, defence will eat up the largest portion of the national cake, a full 18 per cent of it. And what exactly will this whopping amount buy us? Practically nothing. After spending nearly 70 per cent of it paying, feeding, clothing and housing the existing manpower and maintaining the existing equipment, next to nothing would be left for renewals and additions.

Today the Indian Army spends nearly 90 per cent of its annual budget on maintenance, on just looking after its existing resources. The Army will have only about 10 per cent left in the kitty after that for modernisation. A paltry sum of about Rs 10 billion can hardly be enough to replace outdated equipment.

Escalating equipment costs, coupled with the demise of the Soviet Union in 1991, have ensured our inability to keep our defence forces supplied with the latest in defence hardware at affordable costs. Just the replacement of the Army's tank fleet will gobble up about five years of the Army's modernisation budget. How have we landed ourselves in this soup? Is the automatic answer an increase in the Defence Budget?

The 1980s were the profligate years. An indulgent political leadership gave in to every wish and desire of the Armed Forces. The Army got its guns and tanks, the Navy its ships and the Air Force, the latest aircraft. By 1989, India's Armed Forces made the Time magazine cover. The Defence Budget doubled in just five years between 1985 and 1990. Nobody cared about the costs. The budget deficits kept increasing, a hundred-fold in just 10 years. The resultant heavy borrowing increased the external debt from about $ 30 billion in 1980 to nearly $ 80 billion by 1990.

For the first time, proud India was in danger of defaulting on loan repayments. Our harassed finance men were at last compelled to put a capping on the burgeoning defence expenditure. What has been the response of the Armed Services fraternity to the freeze on defence expenditure? There has been a chorus of protest and cries of foul play. Having had things their own way in the eighties, it is natural for them to refuse to come to terms with reality.

For years we have rationalised our growing defence expenditure by convincing ourselves that at 3 per cent of the GDP, we are one of the lowest per capita spenders in the world on defence. Generations of defence officers have been brainwashed into believing that defence means development. Since Independence, India has spent over Rs 2,000 billion on defence. Let us ponder what this vast expenditure has done for the country.

The annual human development report of the United Nations invariably ranks India a lowly 136^th or so amongst the 173 countries listed. Even Bangladesh has now overtaken us. Pakistan is not much better placed, securing the 132^nd place. After 45 years of Independence, India has made tremendous progress in many areas of human development. Life expectancy has increased form 44 in 1960 to a respectable 60 by 1990. Infant mortality has decreased from 165/1000 in 1960 to 90/1000 30 years later. More people have access to safe drinking water and the literacy rate is climbing steadily.

Yet amidst all this good news the basic statistics make depressing reading. More than half of the population (470 million) still lives in absolute poverty. As many as 220 million Indians do not have access to safe drinking water. A staggering 750 million live without access to sanitation facilities! There are 73 million malnourished children below the age of five.

It is necessary to keep these statistics in mind when thinking about defence expenditure. Have we lost sight of the wood for the trees? Are we really building a magnificent moat around a hollow and decrepit castle? It is about time we called the bluff. Defence spending is an unfortunate necessity. It contributes practically nothing to the economic or social development of the country.

Admiral J G Nadkarni, continued

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