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General Musharraf must be smiling

So Pakistan won the Kargil war after all.

If the allocation for defence in the latest Budget is any indication, then her leaders have achieved all their aims in that conflict. While the Indian armed forces, hawkish defence experts and jingoists are dancing in the streets, General Musharraf must be quietly smiling with satisfaction. His strategy has worked perfectly and India has fallen for it hook, line and sinker.

Let us see what he has managed to achieve. By infiltrating about 500 militants in Kargil while India was napping and at a minimum cost to himself, he has compelled India to increase its defence budget by a whopping Rs 130 billion. A portion of that will be recurring expenditure, the cost of forever watching every inch of the icy and inhospitable slopes.

A great deal more will go towards acquiring equipment to guard the border. Unmanned surveillance aircraft, electronic warfare equipment and other requirements to keep a force permanently atop the icy slopes of Kargil. In fact, Musharraf need not send a single man to Kargil for the next 10 years, but our vigilance and, of course, the expenditure will continue.

The massive increase in the defence budget has also caused an increase in the fiscal deficit and eventually it is bound to make a dent in our fragile economy. With the new increase, India's defence budget, which had remained at about 2.5 per cent of the GDP during the past decade, will once again cross the three per cent mark.

Defence experts defend the increase with the plea that at three per cent of GDP the expenditure is still below world standards. Many western countries spend in excess of four per cent on their defence. Pakistan, they point out, spends nearly seven per cent.

Linking defence expenditure to the GDP of the country is one method by which experts bamboozle the innocent public. The arguments are entirely fallacious. What a country intends to spend on its defence surely depends on its defence commitments, which more or less remain fixed.

Let us say India intends to defend "every inch" of its border with Pakistan for which it requires 20 divisions. The cost of equipping and maintaining those 20 divisions will require, let us say, Rs 150 billion each year, which may amount to one per cent of India's GDP.

Pakistan, which has the same length of border with India, will also require 20 divisions and Rs 150 billion to secure their defence. However, Pakistan being 1/7th of India's size and economy, as a percentage of GDP she will have to fork out seven per cent of GDP to match India. Conversely, if she wants to spend only one per cent of her GDP she will only have 3 divisions against our 20. That is, of course, totally unacceptable to them. The simple fact is that small countries bordering big and unfriendly neighbours are compelled to spend excessive amounts on their defence.

Further, defence expenditure to a large extent depends on your national interests and threats, which again largely remain fixed. As the country becomes more affluent the percentage of GDP spent on defence would surely come down.

There is nothing sacrosanct about percentage of GDP expenditure. Just as there are countries which spend more than three per cent on defence there are an equal number which also spend very little. Brazil, another third world country which has a common border with many more countries than India, spends only one per cent of her GDP on defence. Japan is another, which reluctantly crossed the one per cent mark a few years ago.

Far more important than the percentage of GDP jugglery is to find out where the money goes. India's defence forces have been crying out for modernisation of equipment for many years. All the three services went through a barren period in the 90s. The Indian navy, which requires to replace about four ships every year, did not place a single order on shipyards for nearly 10 years. No action was taken to replace the two carriers.

The air force has been crying out for an advanced jet trainer for over a decade, not to speak of other modern aircraft. The much-hyped Arjun MBT has been a big disappointment and the army wants the T-90 tanks. The Bofors gun is already 13 years old and will require replacement. The list is enormous.

Unfortunately, the basic flaws in our defence budget will remain, even after the increase. A large portion will go towards meeting the recent pay hikes of the personnel. Another Rs 200-odd billion will be the enhanced cost of increased vigil in Kargil. So what does all this leave the army for its modernisation?

Not very much. The one time grant of Rs 500 billion is not likely to make much of a dent in the backlog of funds required for modernisation. But then what does one expect when 85 per cent of what you get goes in paying, feeding, clothing and maintaining a massive manpower of 1.2 million. No amount of additional money will ever be enough to modernise this mammoth force. One can never have both quantity and quality. To improve the latter we must reduce the former. That, of course, is heresy, not only to the army, but also to the politicians who look upon India's armed forces as a huge employment agency.

The air force and the navy will be a little better off. Both have fortunately controlled their revenue expenditure allowing them more funds for their acquisitions and replacements. They should be able to meet some of the backlog while the finance minister is still in his "feel good" mood.

The tragedy of India's defence modernisation is that it has been done in fits and starts in the past. There are long barren stretches and resource crunch periods followed by a year or two of sudden and excessive spending after a Kargil.

The crying necessity is to have a 10 or a 15-year defence modernisation plan. India's defence forces have been producing such plans for many years now. Sadly, neither the defence nor the finance ministry takes them seriously and every so often each service is required to go through the whole exercise again. Sometimes shocks like Kargil send the mandarins of South Block scurrying to dig out old requests. Mindful of public opinion, the government turns into Santa Claus and the services suddenly get some of the things they demanded many years ago.

God knows, India's armed forces are badly in need of modernisation. However, such ad hoc, populist but rare increments are not likely to meet their requirement. Only a long term financial commitment and sacrosanct replacement plan may help in the long run. Alternatively, we may ask General Musharraf to oblige us by staging an intrusion every year.

Admiral J G Nadkarni (retd)