Home Army Technology What the defence budget 2019 says about the Indian Army | ORF – Observer Research Foundation

What the defence budget 2019 says about the Indian Army | ORF – Observer Research Foundation

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The Indian army is a manpower-intensive military. With the second largest military in terms of personnel, the Indian armed forces have always faced a shortage of funds when it came to the introduction of modernised and indigenous equipment.

To their credit, the Chief of Army Staff, General Bipin Rawat has strongly suggested the need for a radical restructuring within the Army. Photo: Press Trust of India

The Modi administration recently revealed its interim budget for the calendar year 2019-2020 is one which has already generated controversy. From the extremely low pension of Rs 6,000 a year for low income farmers, another pension scheme for workers in the organised sector amounting to Rs 3,000 a month after the age of 60, and the income tax exemption bracket being increased to Rs 5 lakh are just some of the measures this government has seen fit to undertake to provide much needed relief to the lower sections of society. While these measures have been stated to be nothing more than vote-capturing tactics for the 2019 general elections, one of the major changes the Finance Minister was proud to announce was the increase in the defence budget, which officially crossed Rs 3,00,000 crore for the first time, “the highest in any year.” While it is good news the Indian armed forces have seen an increase in their budget, it is still a budget which does not satisfy the minimum requirements of a modern day military.


While it is good news the Indian armed forces have seen an increase in their budget, it is still a budget which does not satisfy the minimum requirements of a modern day military.


If one looks at the military expenditure of India, it becomes clear that the Indian Army is a manpower-intensive military. With the second largest military in terms of personnel, the Indian armed forces have always faced a shortage of funds when it came to the introduction of modernised and indigenous equipment. The Indian armed forces have always stuck to a policy of procurement over indigenous production, staying close to the mantra of the Cold War era, when India was recently born and lacked both the financial strength and the technological knowhow to obtain self-sufficiency in the realm of defence production. While India may have developed since the 1990s to become one of Asia’s largest economic powers, this budget does not showcase the required level of indigenisation required for any economic powerhouse to truly become self-sufficient.

With a total allocation of Rs 4,31,011 crore to the Ministry of Defence (MoD), the Indian armed forces sees an allocation of Rs 3,01,866 crore. Through this breakdown, we see almost 66 per cent of the total allocation reserved for year-round expenditures, such as salaries. The rest has been reserved for the armed forces’ capital expenditure, which includes the required funds for the procurement of equipment, such as the Russian S-400 Triumf, the Ballistic missile Defence System intended to protect Indian airspace and territory from any missile attack from an adversary. Despite this, the Indian Army still remains the dominant recipient of the defence budget with a total of 56 per cent. However, when it comes to the modernisation allocations, the Army still lags behind the Air Force, with around Rs 36,000 crore being allocated for the raising of newer squadrons, with the Navy receiving the greatest in terms of modernisation budget.

However, while the budget may have seen an increase in terms of absolute numbers, the fact still remains that the government sees the military as a manpower-intensive institution, placing emphasis on the payment of defence pensions and salaries over providing the military with the much needed tools to keep up with the more modernised militaries in the region. While the Army, for example, still takes home the lion’s share of the defence budget, most of this share is gone in the maintenance of its current and increasing number of troops. Comparing this with militaries in our own region, China has, through its military reforms and restructuring, shed quite a lot of manpower in favor of quicker maneuverability and a stronger and technologically advanced navy. To their credit, the Chief of Army Staff, General Bipin Rawat has strongly suggested the need for a radical restructuring within the Army to ensure more money comes towards its modernisation budget. However, this budget is proof that, thus far, the government has chosen not to adopt these recommendations, choosing instead to keep the status quo.


When it comes to the modernisation allocations, the Army still lags behind the Air Force, with around Rs 36,000 crore being allocated for the raising of newer squadrons, with the Navy receiving the greatest in terms of modernisation budget.


The Make in India project was one touted by the Prime Minister through his tenure, wanting to shift India’s reliance on foreign to indigenously produced material. To this end, under the Startup India initiative, the government plans to incentivise the startup industry to create products indigenously, helping the Indian economy in the bargain. The defence industry was not excluded from Startup India, with the Department of Defence Production initiating the Innovations for Defence Excellence (iDEX), with the hope of encouraging startups to collaborate with the government on the creation of indigenous technologies and equipment. However, this budget, despite the efforts of the department of defence, shows the absence of encouraging startups, with very little money being given to the DRDO and only enough funds being provided in their capital expenditure to cover their committed liabilities, which include missile systems from Russia, and fighter jets from France. While a few startups have seen success in the acquisition of government contracts, the overall lack of investment is sure to hurt the modernisation of the armed forces, which already suffers from a deficiency in quality indigenous equipment. Involving startups and private companies will not only create a more competitive environment for the production of better equipment, but will also give India’s defence sector the ability to purchase indigenous equipment from domestic industries, one of the truest expressions of the Make in India project touted by the Prime Minister and his government.

Thus, since this budget still sees the Indian armed forces as a manpower-intensive force, more attention needs to be paid towards ensuring these soldiers have the latest equipment in their possession to combat any threats that they may find. The ruling government, whoever they may be after the 2019 general elections must take into account the need for new technologies to counter the new levels of threats putting India’s security in the crosshairs. Armed forces in the west have already adopted this teaching and are always in the process of developing new technologies to give them the edge over their adversaries. The Indian government needs to take cognisance of this fact when preparing the next budget to address these grave shortfalls.

The views expressed above belong to the author(s).

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