Army marches slowly to modernisation as Air Force, Navy lead in spending

A large part of Army's funds allocation goes towards meeting recurring expenses

The world’s most recognisable firearm was first developed based on a German assault rifle of similar design. The Kalashnikov helped make Russian soldiers more effective, reduced production costs and replaced old weaponry.

The Indian Army’s effort to modernise for the 21st century may be going slower than with the Navy or the Air Force. The capital outlay for the Army grew at a compound annual growth rate of 4 per cent in the last five years. That is less than half the growth rate of the total capital outlay on defence services overall (chart 1).

The revised estimate for Financial Year 2023-24 (FY24) showed a lower absolute spend on the Army (Rs 33,411.2 crore). It was Rs 51,052.2 crore for the Navy and Rs 58,111.6 for the Air Force. To be sure, defence purchases can be lumpy and a large order can skew the numbers for any given year. The Army has now fallen behind the other two services for four years in a row. Budget estimates for 2024-25 were unavailable. The outlay for all three services will reportedly be clubbed together to “foster jointness among the services” by consolidating their requirements, according to media reports.

It is not that the Army does not get priority in terms of allocations. A large part of its allocation goes towards meeting recurring expenses such as salary. Such revenue expenditure was worth nearly six times the capital outlay in FY24. The revenue expenditure is significantly lower for the Navy and Air Force (chart 2).

Pension expenses cost the Army Rs 1.2 trillion in 2023-24. The Air Force and Navy, which are smaller forces, had combined pension expenses of Rs 0.2 trillion (chart 3).

Aids to modernisation, such as research and development, have not been a key area of focus. 

Parliament’s Standing Committee on Defence, in its review of the working of the Defence Research and Development Organisation, quoted an official who said that while India spends around five per cent of its defence budget on research and development, other countries spend 10-15 per cent.

A re-ordering of priorities may help both the Army, and defence services as a whole.