Budget 2019: Gaon, garib aur kisan but no jawan

Updated: Jul 05, 2019 7:05 PM

Union Budget 2019 India: A perceived $3 trillion economy of 2019 and the sixth largest economy of the world cannot shy away from its defence security voids.

budget 2019, budget 2019 india date,defence budget, nirmala sitharaman, tax benefit,industry expectations, budget 2019 india, budget 2019 date july, buget 2019 expectations, budget 2019 pdf, budget 2019 time, budget 2019 news, budget 2019 july, budget 2019 liveBudget 2019-20: India’s multi-spectrum security challenges today, are fast outpacing capability building process impinging upon our national security.

By Lt Gen A B Shivane (Retd)

Union Budget 2019 India: The defence of a nation is the responsibility of the government in power with the defence forces the principal executors. This ability/inability to defend a nation is dependent on nature of present and future threats it faces, the capability of its defence forces to counter these threats and the political will with strategic autonomy to empower this capability.

This requires envisioning the strategic security landscape, having a national security doctrine in place, a future-ready modernized force with desired capabilities and a decisive political will to empower and generate this capability through supportive budgetary allocation and decisive strategic direction.

Union Budget 2019 LIVE: Petrol to be more expensive, more tax on rich, relief to middle class announced by Nirmala Sitharaman; PAN, Aadhaar interchangeable

Unfortunately, all these remain elusive and at best blurred in the present capability paralysis. A perceived $3 trillion economy of 2019 and the sixth largest economy of the world cannot shy away from its defence security voids. India has stated the goal of a $5 trillion economy by 2024-25 but has lost sight of its insurance by way of credible defence deterrence, to preclude any turbulence to its growth and progress. The economic growth of that stature must also state the perceived status of defence fiscal growth over the same period, in pursuit of national security goals. The Finance Minister’s slogan on budget presentation speech of ”Mazbut Desh Ke Liye Mazbut Nagrik” is inspiring but needs a “Mazbut Sainik Mazbut Desh” focus too.

Watch FE Explained video: What is Union Budget?

India’s multi-spectrum security challenges today, are fast outpacing capability building process impinging upon our national security. The capability cum technology gap between our adversaries; in particular, the northern borders are widening, diluting our credible deterrence in the north and punitive deterrence in the west.

Balancing the risks between present force requirements and future force vulnerabilities further complicate the equation. In order to bridge this capability gap, induction of high technology military systems, force multipliers, creation of requisite infrastructure and joint force capabilities are required to complement the present force rightsizing and reshaping effort. Further, success in countering future threats will require skilful integration of the core competencies of the three Services and their transformation into an integrated force structure is driven top-down by politico-military synergy.

The reality of the present defence budgetary allocation is that it gives extremely limited fiscal space for sustenance and addressing present “hollowness”, new schemes for modernization to address the elusive “30:40:30 equipment profile” or scope for meaningful “Make In India” projects. The fiscal space is chocked with many of the promised ‘populist’ measures limiting a budgetary envelope for defence.

The capital budget for acquisitions may not be even sufficient to meet the committed liabilities (CL) or to pay for signed contracts. The new contracts of meaningful capabilities thus remains a myth. Can we fight and win tomorrow’s wars with yesterday’s capabilities with the lowest defence budgetary percentage of GDP allocation of near 1.44% since independence?

Does it require another 1962 debacle to raise the present budget to like it did in the past, when the defence budget in 1962 prewar was 1.64% and post-war hiked to 3.7% of GDP? Further, the MoD has undertaken a host of initiatives to change the course from Swadeshi towards Make in India to promote indigenous defence manufacturing aimed at increasing defence production to Rs 1, 70,000 crore by 2025.

These promises and policy initiative of “Make in India” remains hollow with the failing fiscal support to the much-hyped ‘Make’ projects eg FICV. Moreover, the miniscule fiscal allocation under this head in the present budget is indicative of the emphasis on these projects which are the key to invigorating a defence ecosystem.

Another reality lies in the inability to identify the sweet spot between the contradictions of “A budget sized to the Army or an Army sized to the budget” and balancing the 3 M’s – Manpower (force size), Material (sustenance) and Modernisation (capability building), to address our security concerns within the given budgetary envelope. A large monolithic army which has expanded 3.46 times since independence cannot have the luxury of time-critical modernization with an adverse revenue capital ratio of 82:18. Expansion, sustenance and modernization cannot progress in direct proportionality.

Thus, a holistic politico-military transformation is the need of the hour. An effective transformation strategy in our context must tackle the following six issues: the “bigger the better” syndrome, the absence of a strategic culture exemplified by the void of a national security strategy, the sustenance and capabilities voids, the quantitative and qualitative imbalance and lack of reforms in the defence budget, bureaucratic decision-making apathy and risk averseness, and the absence of jointness led by the glaring void of higher direction by a Chief of Defence Staff.

To be capable to counter future threats, we must address all three critical components; transformed politico-military culture, transformed defence planning process and transformed joint service capabilities through supportive budgetary reforms. The budgetary reforms need is to work out pragmatic modalities for a non-lapsable “Defence Modernisation Fund”(DMF), restructuring cum rightsizing and right balancing MoD, the delegation of financial powers of DMF at MoD level, outcome-oriented and not procedure marred bureaucratic sluggish approach with no time accountability and a services calibrated modernisation strategy (http://www.spslandforces.com/ebook/65012019.pdf) centred on priorities based on value, vulnerability and risks in temporal terms with a joint service outlook.

(The Author is a distinguished Armoured Corps officer and is presently appointed as Consultant Ministry of Defence and Ordnance Factory Board. Views expressed are personal.)

Do you know What is Finance Bill, Short Term Capital Gains Tax, Fiscal Policy in India, Section 80C of Income Tax Act 1961, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.