abhik wrote:rajrang wrote:This is shocking. So, to add to this line of thought - the current Indian defense budget is about 240,000 crores. Assuming the proposed 64,000 crores on the strike core is spent over 8 years, (in India you can never tell how long this will actually take), this will be approximately 8,000 crores per year. This will translate into a 3% increase in India's defense budget. So, the defense budget which is probably 2% of India's GNP will become 2.06%. Remember this is only a one time expenditure, the recurring future annual expenditure will be a fraction of this amount
I think you are grossly over-estimating what we can actually afford. Rs 8,000 Cr/year in capital spending is an absolute HUGE amount for the Army. The entire actual capital spending for last year was only around 16,900 Cr (source). So you are talking about a 50% increase just to fund this expansion.
Union Defence Budget: Expectations and Realities
Aspirations apart, the ground realities of a developing nation always need to be kept in mind and answers need to be found from within. The crux of the problem at hand is that the ideal ratio of 60:40 between the revenue and capital allocation, has got disturbed over the period of time and the same is hugely pronounced in the case of Indian Army. The Revenue budget caters for operation and maintenance expenditure spanning to pay and allowances, transportation, stores (including ammunition) and other budget heads. 67% of the total revenue budget goes towards the pay & allowances and Indian Army being a manpower intensive organization takes a major chunk of the same. While the ratio of Revenue to Capital, for Air Force and Navy is still within the limits (35:65 for Air Force and 41:59 for Navy), for Army it is pegged at 86:14, which is indeed grossly inadequate for any meaningful modernization.
The scales tilted heavily towards the Revenue Expenditure on implementation of the 6th Pay Commission and when we are poised for another Pay Commission in 2016, the criticality is likely to compound. An increase of Rs 24,357 Crore in the Defence Budget for 2015-16, is in-fact an effective increase of just Rs 14,357 Crore, if we consider Rs 10,000 Crore going towards OROP. Hence not much relief is expected for the Indian Army already feeling the brunt of the raising of the Mountain Strike Corps as an unplanned expenditure, which did not form a part of the LTIPP. So the solution lies in correcting the anomaly between the Revenue and Capital expenditure. Consorted efforts need to be worked out to reduce the revenue expenditure.
Following remedial measures may be considered to give impetus to the modernisation of defence forces:-
- Revenue budget needs to be optimized for Indian Army at the earliest. Downsizing to a lean and modern Army to reduce the burden of Pay & Allowances is one such step which needs to be considered.