The Budget presented on February 28 has disappointed the armed forces. With acquisitions in the pipeline worth almost Rs 20 lakh crore, military planners protest that the capital budget allocation of Rs 94,588 crore, not a rupee more than what was allocated in last year's budget, is far less than what is required.
Over a period of 15 years, Rs 31 lakh crore worth of acquisitions are needed, say sources in the Integrated Defence Staff that carries out long-term planning of acquisitions for the three services. Read our full coverage on Union Budget
Adding to the military's disquiet is the repeated inability of the ministry of defence to spend the capital budget on new equipment. Year after year, chunks of the capital budget are surrendered unspent, or diverted to the revenue budget for funding running expenses like military salaries, and maintenance of equipment. (TIGHT PURSE STRINGS)
A Business Standard analysis of equipment requirements over the next 15 years and the likely funds available finds a precarious balance between needs and means.
In the near term, there is precious little money to meet the three services' requirement of Rs 20 lakh crore worth of equipment. However, as the years go by, especially in the next decade, an expected real increase of 10 per cent per annum will allocate Rs 22.5 lakh crore by the end of 2027-28 towards the military's capital budget.
This includes a cumulative total of Rs 5 lakh crore for the army, Rs 5.65 lakh crore for the navy, and Rs 7.72 lakh crore for the air force. Another Rs 4.17 lakh crore will provide capital funding for Defence R&D Organisation (DRDO), Ordnance Factory Board, joint staff, army railroads and military land and buildings.
Given the army's requirements of Rs 5.29 lakh crore, that leaves a shortfall of Rs 30,000 crore. The navy will be short of Rs 1.75 lakh crore. The air force alone might have the money it requires.
These projections assume that the distribution of funds between the three services remains static. In fact, the share of the navy has steadily grown over the years, rising from barely 5 per cent of the overall defence budget to 16 per cent today. The military implications of a "Look East, Act East" policy might result in further increases for the navy, with some analysts predicting that the navy's allocations might inch up to 20-23 per cent of total military spending.
Future budgetary projections are always uncertain, and Lieutenant General Anil Chait, who coordinated tri-service budgetary and acquisition planning until he retired as chief of the Integrated Defence Staff last May, points out that with 60 per cent of the military's equipment requirements being sourced from abroad, any significant rupee devaluation would indeed buy less.
Battling for modernisation
While the army remains the service most in need of modernisation, land systems in general are significantly less expensive than aircraft and naval equipment. A large chunk of the army's modernisation budget will go towards procuring, or indigenously building, modern howitzers, rocket launchers and various missile systems. There will be large expenditure on modernising the army's mechanised forces, including the indigenous development and production of a main battle tank and infantry combat vehicle.
Also being developed indigenously is the digital backbone for a "networked force", which will include communications and data networks like the tactical communications system, as well as soldier-specific networks like the battlefield management system which was kick-started last week.
Trouble at the seas
The navy's maritime capability perspective plan envisages a 160-ship force that is centred on 90 capital warships like aircraft carriers, destroyers, frigates and corvettes. While there are currently more than 140 vessels, the navy has barely half the destroyers and frigates it needs. About five ships need to be inducted each year just to replace warships that are decommissioned after completing their 30-40 years' service. Much of the navy's modernisation budget, therefore, would go towards constructing new warships and submarines.
Submarines will form a thrust area. These include twelve conventional submarines, of which six Scorpenes would start rolling out of Mazagon Dock next year. Another six will be built in India along with a foreign shipyard. DRDO will build another two nuclear missile-carrying submarines of the Arihant class and develop and build six nuclear-powered attack submarines.
A hefty chunk of the expenditure will go towards developing a brand new naval base on the Andhra Pradesh coast at Rambilli, which will be the key operational base for the Eastern Naval Command. Money will also be spent on the Western Naval Command's premier new base at Karwar, and on naval facilities in the Andaman & Nicobar Islands.
Air strike capabilities
With just 35 fighter squadrons against the authorised strength of 42 squadrons, and with another 11 squadrons likely to be decommissioned before 2022-23, the air force's focus is on acquiring fighter aircraft. Besides the Rafale medium multi-role combat aircraft, it will buy six squadrons of Tejas light fighters, 80 more Sukhoi-30MKI fighters under an existing contract, and upgrade its fleet of 50 Mirage 2000 and 125 Jaguar fighters. There is under way an Indo-Russian programme for 144 fifth-generation fighter aircraft as well as another DRDO project for at least 150 advanced medium combat aircraft.
These procurements do not include a host of high-tech development projects that are planned for developing the battlefield capabilities of the future: space surveillance, launch-on-demand satellites, hypersonic vehicles, electronic warfare systems, cyber warfare capability, unmanned combat aerial vehicles and a range of drones that have precision strike capabilities. DRDO has programmes under way to develop high altitude long endurance and medium altitude long endurance drones, long range cruise missiles and an anti-ballistic missile shield to shoot down incoming nuclear-tipped ballistic missiles.
None of these have been budgeted for, except through the DRDO's budget. However, in a 15-year perspective, some of these projects might reach fruition, but their introduction into service would require additional funds.