We can afford it

South Asia is the second most dangerous region in the world. Unresolved territorial disputes with China and Pakistan and the increasing nuclear, missile and military hardware nexus between them have prompted the need for the armed forces to prepare for a two-front future war. The Af-Pak region is the epicentre of radical extremism and creeping Talibanisation is edging steadily towards India’s western border. Pakistan is moving inexorably towards becoming a failed state and Bangladesh, Myanmar, Nepal and Sri Lanka are unstable in varying degrees.

Contrary to recommendations made by successive standing committees on defence in Parliament that the defence budget should be at least three per cent of GDP, this year’s defence budget has fallen to 1.83 per cent of projected GDP. Meanwhile, China has increased its official defence expenditure for 2011 by 13 per cent to US$ 91.5 billion. Its actual expenditure is likely to be close to $150 billion. China’s People’s Liberation Army (PLA) is modernising at a brisk pace. India’s lack of military modernisation and the marked obsolescence of the weapons and equipment of the armed forces will lead to the present quantitative gap with the PLA turning into a qualitative gap as well by 2015-20.

No matter which internationally acceptable yardstick India’s defence expenditure is measured by, besides as a ratio of GDP, it is well below international norms. India’s per capita expenditure on defence is less than $10, while the average expenditure of the top ten spenders in Asia is $800 approximately. At 1.22 per 1,000 citizens, India’s soldiers-to-citizens ratio is also among the lowest in Asia. The average of the top ten Asian nations is about 20 per 1,000.

Although this year’s defence budget shows an increase of 11.59 per cent over the budgetary estimates and 8.47 per cent over the revised estimates for F Y 2010-11, it is barely adequate to neutralise the annual rate of inflation, which is averaging more than 10 per cent and shows no sign of abating in the short term. International inflation in weapons systems, ammunition and defence equipment is usually around 12 to 15 per cent a year. Hence, in real, inflation-adjusted terms, the defence budget has been declining and not increasing in recent years.

It has been empirically established that defence expenditure of up to about three per cent of GDP makes a positive contribution to socio-economic development. Hence, India’s present defence expenditure is eminently affordable. Finally, defence expenditure is a form of insurance: it provides deterrence assurance against war and enables the armed forces to acquire the capabilities necessary to fight and win if deterrence fails.

Gurmeet Kanwal is director, Centre for Land Warfare Studies, New Delhi

Courtesy: Hindustan Times (Mumbai), 22 May 2011

(The views expressed in the article are that of the author and do not represent the views of the editorial committee or the centre for land warfare studies).