Guns and butter

Govt must review its military spending

It has been 10 days since the People’s Liberation Army clashed with Indian Army jawans in the Tawang sector of the Line of Actual Control (LAC), and the political furore as a consequence of the confrontation has not yet died down. Parliament has been repeatedly paralysed about the government’s response to the clashes, which the Opposition criticises as being too weak. Yet the fact is that the government is caught in something of a dilemma. It cannot at this point in time afford a high-profile clash with China along the LAC that would lead to an actual military test. The Indian military has been the subject of under-investment for so long that the outcomes of such a test are very hard to predict.

The fact is that the government has seen the troubled India-China relationship as forcing it to make a choice between development and security — between, as the old economics 101 textbooks had it, guns and butter. New Delhi has, in the past decade or so, decisively chosen “butter” over “guns”. Budgetary resources have been set aside for infrastructure and welfare spending, while the defence budget — even after paramilitaries and internal security are included — is at best 2.5 per cent of gross domestic product. Even within that, the vast majority is spent on personnel costs, especially on pensions after the introduction of the One Rank One Pension arrangement for political reasons. Very little is left over for capital spending, and even that capital outlay is generally already tied up in paying for existing or pre-decided purchases. Modernisation of the armed forces is therefore a distant dream. Under such circumstances, the government no doubt wishes heartily that the India-China relationship can be managed without any further open confrontation.

Yet that hope is clearly doomed to founder, given two facts. One is that the domestic political alignment of the government has clearly led the electorate to expect a certain muscularity in its statements and positions. Thus, for example, External Affairs Minister S Jaishankar insisted on Monday the government “would not allow” any “unilateral” changes to the LAC by the Chinese side and spoke of the “largest ever deployment” of Indian soldiers on the border. This is not the kind of rhetoric likely to appease hawks in Beijing. Nor is the tone of the government-friendly electronic news media, which has been running old videos of border clashes non-stop.

The second issue is that whatever New Delhi’s preferences as to guns over butter, Beijing also has a vote in the India-China relationship — and it has clearly chosen confrontation. Twice now the current Indian leadership has tried to reset relations with China, and each time that supposed reset has wound up being rendered moot by clashes at the border. In this context, rather than persisting with its current contradictory and self-deceiving path, the government will have to start re-investing in security starting with the next Union Budget. India has only one-fifth the per capita income of China, and so matching its northern neighbour militarily may be a tough ask. But effective deterrence of a larger neighbour needs smart strategy and spending choices, not matching budgets.