StatsGuru-08-February-13

Decoding India's defence spending

With defence spending – both in terms of deals and in terms of possible cuts in the Budget – much in the news, the question’s worth asking: How much does India spend on defence, anyway? As Table 1 shows, according to official statistics, the share of defence spending in GDP has declined steadily after liberalisation, with a particular dip after the United Progressive Alliance came to power. International bodies contest this, calculating comparative spending across countries differently. According to Table 2, India spends about as much on defence as a proportion of GDP as, say, the UK or France. The UPA’s initial low spending can partly be attributed to a higher GDP denominator, but not entirely. As Table 3 shows, even as a proportion of central government spending, it dipped sharply. In particular, this is due to an unwillingness to spend even what has been budgeted, perhaps for fear of corruption in defence purchases, though that began to reverse after 26/11, as Table 4 shows. And, according to Table 5, it is interesting to note that, in spite of high-profile purchases for the navy and the air force, in recent years spending increases have favoured all the forces near-equally. Big-ticket capital expenditure may not be as big a proportion of jumps in defence budgeting as some expect. As Table 6 shows, Indian arms imports actually picked up strongly after 2008, with one exception. Table 7 shows which countries benefit most from the arms market. India depends a lot on Russia. (Click here for tables)