Capability Building Approach to Defence Budgeting

Frank B Kelogg winner of the Nobel Peace Prize in 1929 once said, “Adequate defence has been the catchword of every militarist for centuries”. The Kellogg- Briand pact was signed between the United States and France for, “renunciation of war as an instrument of national policy". Pranab Mukherjee, India’s acting finance minister, has no such luxury. He faces a hostile environment from across the country’s western borders in “Talibanised” Pakistan, and a sustained defence capability build-up by China, described as, “a challenge and a priority”. Therefore, the Rs 1,41,703 crore for national defence announced by him as Vote on Account for 2009-10 gladdened many hearts.

The increase in the Defence Budget was 23 percent over Revised Estimates for financial year 2008-09 at Rs 1,14,600 crore. When compared to the Budgetary Estimates of Rs 1,05,600 crore, it is a leap of 34 percent. Over a two year period based on defence allocations for 2007-08 at Rs 91,681.06, the budget for 2009-10 represents a rise by 54.5 percent. This would denote that allocations for defence will double in a cycle of four years, thus the projected defence budget for 2011-12 could well be over Rs 2,00,000 crore. While the budget this year has just cleared the 2 percent GDP mark, in the previous year it was below the same.

So much for number crunching. How do these allocations translate into capability build-up for our armed forces? Would we be able to counter another Mumbai 26/11? Will our Air Force be able to launch the much talked about surgical or punitive strikes in, say March 2010 or earlier? What are we doing to face the long term naval challenge from China? The Defence Budget and its follow up explanations provide no ready answers.

We know that a Budget is the primary instrument of a government for resource allocation in desired areas of national capacity building or alleviation of debility and grievances in the social sector. This has been effectively employed in the past to provide relief to the agriculture sector, create employment through guarantee schemes and enhance health care and education.

While it is agreed that we are facing varied and extraordinary security challenges, the approach to defence budgeting has remained unchanged over the years. The debate has been restricted to issues such as adequacy of allocations pegging it to the GDP, ratio of revenue versus capital budgeting or inter se priority of allotment to the three services.

Despite having recognized the necessity for prioritizing defence allocations, the approach followed in the Defence Budget or Vote On Account for 2009-10 continues to reflect incremental allocations rather than building all-round capabilities. It may be argued that the prerogative for detailed distribution is that of the Ministry of Defence and the break down need not be included in the Finance Minister’s Budget Estimates. Moreover acquisitions are now based on Long Term Integrated Perspective Plan (LTIPP), a 5 years Services Capital Acquisition Plan (SCAP) and an Annual Acquisition Plan (AAP), providing an indirect model for defence capability building.

However, an increase in stake holders in national security, as reflected in the upsurge of public interest post-Mumbai 26/11, denotes the need for a direct capacity building approach to defence budgeting. Moreover, it is also evident that lack of military options wherein escalation control rests in New Delhi, not Islamabad, has consistently led to abrogation of cross border strikes by our national leadership despite the periodic rhetoric of “all options”. It is, therefore, necessary to shift to a more direct capability building approach for defence budgeting.

This is by no means a new recommendation. It has been debated for some years now and the LTIPP model emerged from this discourse. Amongst many specialists in defence finance, Amiya Kumar Ghosh, a former Finance Advisor of the Defence Services, has written about such an approach in the IDSA’s Journal of Defence Studies (Winter 2008). The practice is common in many countries. For instance, public pronouncement of specific capability building is undertaken in the United States. This is related to not just future generic capabilities but specifics in terms of programs, numbers and budgetary allotments. For instance explanatory statements for US Defence Budget for 2009 denote, “$20.5 billion to increase the size of the Active Army to 547,400 and the Marine Corps to 202,000”. Getting more specific, it goes on to allot, “$1.8 billion to continue development and procurement of major unmanned aerial vehicles”, notwithstanding the protests from Pakistan over Predator strikes in the tribal areas. Further there is an allotment of $496 million, “to combat improvised explosive devices through attacking the terrorist network, defeating the device, and training the force”.

So what would we like our Defence Budget 2009-10 to equip us with in the coming fiscal year? A back of the envelope list would include UAVs for close surveillance and target acquisition, stand off ground and air based PGMs to strike across the Western border, night fighting aids for Special Forces, armed UAVs such as the Harpy rewired to strike hard targets in numbers and so on. Have these been budgeted for? Not from what is evident in the public domain.

Security reasons could well be sited to argue against release of such precise information. But, this argument is specious for a number of reasons. In a democracy, withholding information where public monies are being spent can be justified only as an exception in respect of war plans or means of intelligence acquisition. Moreover it is not the equipment that is being acquired that is important but the manner in which will be used that needs to be secret. In any case, tools of the information age and search engines which “crawl” the, “Deep Web” can easily provide the same information. The final argument is that such information would add substantially to deterrence, dissuasion or compellance practices in strategy.

Capability based defence budgeting would also build better accountability, create greater confidence in the public about defence ability and avoid the ignominy of apologies by our leaders for failures of omission as witnessed post Mumbai 26/11. Given greater public awareness and demand for security information, it is evident that the time for such an idea has come.        

(Disclaimer: The views expressed in this article are those of the author and do not represent the views either of the Editorial Committee or the Centre for Land Warfare Studies)