After LAC disengagement, India needs to increase defence allocation

We talk much about our military but do not put our national wallet where our mouth is. While nobody is saying we double our defence spending, the current declining trend must be reversed

The India-China LAC disengagement is both a major step forward in the assertion of our national resolve, and a reminder that military capability gaps between India and China have already reached unsustainable levels. These are widening.

 

The positive outcomes first. It is hugely creditable how Indian troops stood on these heights looking the Chinese in the eye, never flinching. This was also a demonstration that the last decade’s flurry of infrastructure-building along Himalayan borders has begun to pay off.

 

There is no other way India would have been able to move additional forces — including an entire strike corps with its armour and mechanised forces, ammunition and support arms — to these heights in express time. Continuous resupply and maintenance of over 60,000 troops at altitudes ranging from 14,000 to 17,000 feet underlines the brilliant work done by our government, army, engineers and contractors.

 

Celebrations done, we must prepare for the inevitability of another standoff with the Chinese in the next three to four years. That’s been the rinse-repeat pattern since 2013, directly coinciding with the rise of Xi Jinping.

 

He took power with the resolve to demolish the post-1993 status quo established by a series of agreements aimed at maintaining peace and tranquillity along the LAC or Line of Actual Control. One reason he felt he could afford to do so was the military capability differential that had grown between India and China.

 

There was Depsang first (2013), Demchok (2016), and then Doklam in 2017. The 2020 move in eastern Ladakh, at least in my analysis, seemed an offensive pushback to the change in Jammu & Kashmir’s constitutional status, the declaration of Ladakh as a Union Territory, and a renewed assertion on retaking Aksai Chin. Mr Xi read it with India’s rushed infra building and increasing force deployments in the area. He decided to pile in the forces to demonstrate to India the gap in capabilities, or the costs of merely ensuring no Indian territory is lost. This, India has managed to do, albeit at great cost financially.

 

There’s also a cost in shifting the balance of its forces, especially strike forces, between the two fronts. The activation of the western Himalayan frontier did result in the diversion of a strike corps equipped, trained and tasked to attack deep into the Pakistani plains to these heights.

 

Another division-sized force was moved out of its counterinsurgency role in the Jammu-Poonch-Rajouri area and Pakistani infiltrators have taken advantage of it. To counter this, once again, a division allocated to strike formations on the Pakistan frontier has been moved in.

 

Another division has been moved to the central sector, to be the bulwark of the new China-focused corps (Uttarakhand frontier) being raised at Bareilly. This is a massive change in the Indian Army’s order of battle across the two fronts. Pakistanis are watching. The Chinese, on the other hand, do not have any “active” fronts. They have the luxury of treating most of their forces as a strategic reserve since, in their neighbourhood, they are the only ones with the moves.

 

If, in the past decade, we have had three-and-a-half major standoffs with China, India would be delusional not to brace for another in the next three years or so. At least that’s the algorithm. Where it could be will always remain the question, because China can conjure up “differences” anywhere along a 3,500-km-plus frontier. This will keep India off-balance, distracted from its deterrence against Pakistan. It already feels emboldened to resume “activity” in Kashmir. The Chinese have also done India a favour by underlining that its latter-day pacifist approach to military spending and modernisation was unsustainable. When the first Narendra Modi government came to power, the promise was to greatly up defence spending, which it charged the United Progressive Alliance (UPA) with neglecting.

 

Data tells us that in the initial years of National Democratic Alliance-I (NDA-I ), this promise was kept. Defence spending rose as a percentage of both the budget and gross domestic product (GDP). In 2013, defence took up about 16 per cent of the national budget. Two years into the Modi era, by 2016-17, it reached 18 per cent. That was a significant rise in an expanding budget.

 

It started declining thereafter. Today it is just 13 per cent. That was never the expectation from the Modi government. And this came despite the introduction of One Rank One Pension, and thereby increased pension costs. Any impact of the Agnipath scheme on pensions will take 15 years to materialise. Most of this data is from a paper by PRS Legislative Research.

 

It seems that by his third year, Mr Modi came to the conclusion that a real war was highly unlikely, if not impossible. More resources, therefore, did not have to be pushed into defence and could be utilised on welfare instead. It worked well electorally, and national security could still be counted upon to bring the emotional upsurge (Pulwama-Balakot, 2019) when needed. All it took was the tiniest skirmish. The same trend of defence budgets declining as a ratio of GDP and national budget continued year after year to reach today’s levels — the lowest since perhaps 1960, as indicated by data from macrotrends.net. In the current year, our defence budget is 1.9 per cent of GDP.

 

The rude Xi Jinping nudge will now shake us up from this complacent mindset. We talk much about our military but do not put our national wallet where our mouth is. Nobody is saying we should double our defence spending or take it to the peak Rajiv Gandhi reached in 1987 (4.23 per cent of GDP), our highest ever. But the ongoing decline must be reversed. What if India targeted an increase of a mere 0.2 per cent of GDP in the defence budget next year? A calculation done with the help of India’s foremost defence budget analyst, Laxman Behera, associate professor, Special Centre for National Security Studies at JNU, shows that presuming a 7 per cent GDP growth, with the defence budget remaining at the current 1.9 per cent of GDP, the defence forces will have about Rs 43,000 crore more next year. Much of it will be eaten up by increases in salaries (about three pending annual increments and at least two instalments of dearness allowance). That will leave very little for modernisation and acquisitions.

 

A mere 0.2 per cent rise in the share of GDP for defence (to 2.1 per cent from 1.9), will put about Rs 1.22 trillion additionally at their disposal. This India can afford. Since defence planning cannot be episodic, this should be accompanied by a clear statement of intent to take spending up by just 0.1 per cent of GDP each successive year until it reaches 2.5. This additional money should go into acquisitions and modernisation, from fighter planes to submarines, missiles and long-range artillery and, of course, hugely needed improvements in cyber and drone warfare capabilities.

 

This would mark a major reversal of the trend since 2017. The government may still be right in thinking that a major, all-out war is not likely to happen. But if your actions—as in diminishing defence spending—expose your thinking to your adversaries, they may interpret this as complacency and move accordingly. The best guarantee of peace is to look prepared for war, build obvious superiorities over rivals in some key, visible areas. Anything less will encourage both China, and soon enough, Pakistan into unleashing low-level but debilitating adventurism. India cannot afford to leave itself vulnerable. Reversing the decline and raising defence spending slowly to 2.5 per cent of GDP in the next four years is what India needs, and can surely afford. 

 

(Next week: How to raise some additional resources and where to build superiorities)

 

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