Union Budget 2020-21 And Armed Forces
06 Feb 2020 15:51:25
Union Budget 2020-21, was presented by Finance Minister Nirmala Sitaraman on Saturday 01 February 2020, carried a visible imprint of the Prime Minister’s fiscal conservatism by keeping a tight leash on expenditure.
Prominent themes of the budget are (a) Aspirational India in which all sections of the society seek better standards of living with access to health, education and better jobs, (b) Economic development for all, indicated in the Prime Minister’s exhortation of “Sabka Saath, Sabka Vikas, Sabka Vishwas” and (c) Caring Society that is both humane and compassionate.
Though Finance Minister quoted couplet of Tamil Poet Thiruvallar, at end of Part 1 of her budget speech, highlighting the importance of Security by emphasizing that National Security is “Top Priority” of her Government, she gave a slip to Armed Forces thereby, negating “Hamara (Armed Forces) Vishwas”. Defense Experts/Analysts were disappointed with the lackadaisical attitude of the Finance Minister.
The outlay for defense in the budget has been hiked by 5.8 % which in real inflated adjusted terms is ‘Contraction’ and is one of the least allocations since 1963. In view of the growing threat from China and Pakistan, this is grossly insufficient to safeguard our Five Trillion Dollar Economy expected in the next five years.
No matter how much we cry from hell to high water, Armed Forces, for sure, will be facing smaller outlays in the coming years. This is clear from the fact that Defense Outlay did not figure in the Finance Minister’s budget speech in 2019 and 2020. If the Indian economy is in an ICU, the Defense Forces are under a knife on an operating table. Therefore, it is high time that Armed Forces, by themselves, must seriously think of doing ways and means to modernize in given outlay.
They now have to remember that this very “Contracting Defense Budget” will have to cater for modernizing in Conventional Domains as well as the costly, New Technology Domains like Cyber, AI, Robotics, Unmanned Systems, Space and so on.
“Indian Economy in a slump or on a Slow Growth Path” is a matter of debate amongst knowledgeable persons in the field of Finance. But Stark Fact is, Armed Forces are and will be in future, up against tighter Budgetary Constraints of allotment which as on date is only 1.56 percent of our GDP.
China with her Seven percent and Pakistan with Four percent allocation of GDP has no constraints on their Defense Allocations irrespective of their economic woes. Reflexive and voluble demand by Armed Forces for a hike in Defense Allocations is not going to be accepted by the Government. The prevailing economic slowdown will continue in the future. Therefore, Armed Forces will have to modernize with reducing budgets in an environment of increasing Threat Perception.
Traditional defense providers in India; DRDO, PSUs and OFB are not meeting Indigenization Aspirations of Armed Forces. Foreign Defence Suppliers are constantly milking India with price increases and our procedures are strangling us. Instead of bringing it on rails, Political Hierarchy is of the view that our Nuclear, Space, and Missile Programs will provide us with ‘Security and Stability’. What they forget is that there is an increasing ‘Instability’ due to our inability to equip our Armed Forces optimally. There would be very many articles decrying reduced allotment to Armed Forces in the wake of Introduction of Finance Bill full of facts and figures.
The aim of my article is to suggest ways and means overcome out of this imbroglio of Reduced Allotment and Need for Modernisation by adopting varied concepts as given below:
A) Import Substitution. Several items are imported by respective Services, Ordnance Factories, and Public Sector Undertakings in a routine manner to include Parts, Components, Subsystems and Assembles which are of low technology but needed on a regular basis for existing equipment which are/was once imported. At times, the list even has silly items like Nuts, Bolts, and Washers. Many/Most of these items can be substituted through indigenization to save costs, time and effort. There is, therefore a requirement to identify such items and formulate, launch and run a “Multipronged Import Substitution Drive” by all Revenue Procurement Agencies, MSMEs and Research Institutions/Organisations. The concept has immense potential and very high payoffs beyond the immediate.
B) Reverse Engineering. This concept is accepted and followed worldwide. China has progressed to hi-tech weapon systems, by reverse engineering. India has done it in the past in the early ’80s when 105 mm UK Light Gun was brought to and left in India for a couple of months due to lack of ship passage. A Gun Development Team was put together which reverse-engineered it. That is how erstwhile 105mm Light Field Gun was inducted into service. It is still in production, in-service and giving yeomen’s service in the mountains. It is still identical to the UK Light Gun. During the 1971 War, few bolt mounts of 106 millimeters Anti Tank guns of my unit were crafted by wayside Sikh Iron Smiths in Samba when they gave away due to excessive strain of continuous firing. India has huge potential for Reverse Engineering but there is an urgent need to tap it. This would entail, “Identifying and undertaking Reverse Engineering Projects” on a mission mode and execute it according to our requirements.
C) Quality Control. If there is one area in which the Defence Research and Development Organisation, Directorate General of Quality Assurance, Ordnance Factories and PSUs are guilty of is lack of Quality and Accountability. The statistics and reports in the Ministry of Defence are testimony to this. These are inefficient organizations, per se. Most accidents and incidents with indigenous ammunition, rockets, and missiles take place due to abjectly poor quality. There is no concept of accountability. This is compounded by abject strong-arm methods by Labour Unions. That is why Desalts Aviation Corporation of France refused to manufacture their Raffel Fighter Aircrafts in HAL. There is a dire need to inculcate/institute “Stringent and draconian quality control and accountability measures”. If it means sacking a few heads of factories and establishments, so be it.
D) Operational Relook. A realistic Joint Operational Outlook will allow us to reduce manpower and prioritize capital expenditure. Our main adversary is China with Pakistan coming second. We must think and convert Three existing Armor/Mechanised Divisions of Strike Corps ranged against Pakistan, into “Mountain Capable Reserves” composed of Infantry and lightweight long-range Artillery. This could be achieved by shedding Armor Component to the Defensive Formations to take care of Pakistan. The resultant will be “Mountain Capable Dual Tasked Reserves” capable of handling both fronts. The entire strategic dynamics will get an uptick with a considerable saving in manpower. This aspect has to be weighed against public sentiments and opposition war cry for taking/initiating steps in relation to National Security.
E) Capital Procurement Prioritization. There is no doubt that Capital Procurement (purchase of Arms/Equipment/Vehicles/Armor/Aircraft/Ships) will and must go on. However, there is a strong case for prioritization and phasing of procurement as per what we can afford and what is operationally necessary. Such prioritization should be consistent with the way the cases are progressing. This must be combined with Rollover of Budgetary Allocation, for setting in of true economy. Newly appointed CDS, General Bipin Rawat has set his goals by announcing the creation of Air Defence Command.
F) Manpower Reduction. There is no alternative to manpower reduction. Define a joint threat that the nation must contend with. Structure Forces accordingly. W e can have ‘Boots on the Ground’ or a “Technology-Driven Force” but not both. The same task could be carried out differently through double tasking. the CDS and Service Chiefs must take a reality check on manpower issues. My colleagues in Armed Forces will be very critical for going against our established Ethos by advocating this measure. But CDS is already mulling on this issue.
G) Indigenization. Indigenization is the only mantra that could bring Armed Forces out of Red in terms of generating funds at lesser costs. Despite the clarion call of “Make in India” and "Startup India” with everyone parroting it at any given opportunity, our big-ticket items are still foreign. PSUs, OFB and DRDO have not come up to the mark in indigenization for many reasons. With disruptive technologies making a Disruptive Impact on Military Affairs this issue will only get worse
H) Jointness. There are positive vibes that newly appointed CDS will bring in Jointness. The bigger hope will be to see how he can motivate Services to maintain common inventories, use common logistics, use common communications, use common training facilities, use common infrastructure and so on. If these tasks which are revenue-oriented are taken up seriously, there will be a lot of cost-saving resulting in Revenue expenditure optimization.
Armed Forces Procurement and Capability Building System must be reversed by doing things differently and Jointly. The present system seems to reinforcing failure. They need to be realistic about their dreams by creating/crafting success with what we have. THAT IS THE NEED OF THE DAY.