India’s defense budget has been hiked by a measly 7.81% to Rs 2,95,511 crore from Rs 2,74,114 crore last year, once again dashing the hopes for any major jump in military modernization this year despite heightened tensions with both Pakistan and China along the unsettled borders.
The defense outlay works out to just about 1.58% of the projected GDP for 2018-19, the lowest such figure since the 1962 war with China. Though this figure has been steadily declining in percentage terms as the economy expands, military experts contend it should be over 2.5% to ensure the armed forces are capable of tackling the “collusive threat” from Pakistan and China.
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Moreover, the defense budget includes a capital outlay of just Rs 99,563.86 crore for new weapon systems and modernization, which is dwarfed by the revenue expenditure (day-to-day running costs, salaries etc) of Rs 1,95,947.55 crore. The defense budget does not include Rs 1,08,853 crore separately allocated for defense pensions.
The annual defense budgets have shown a discernible trend of declining modernization outlays for new projects, with almost 80% of the outlays earmarked for “committed liabilities” (installments for arms deals inked in earlier years) and a skewed revenue to capital expenditure ratio. This has meant that the Army, Navy and IAF continue to grapple with critical operational gaps on several fronts ranging from fighters, helicopters and submarines to helicopters, howitzers and modern infantry weapons.
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