How India Can Increase its Defence Budget

India stands alone and must devise a strategy to simultaneously tackle a bunch of hostile nations living next door.

(Photo: Kamran Akhter/The Quint)

Perhaps one of the most frequently quoted ancient philosophers when it comes to war and preparing for war is Sun Tzu.

One of the lesser-known pearls of his wisdom, however, says that you must “compare the opposing army carefully with your own so that you may know where strength is superabundant and where it is deficient.” The teaching is profound, yet of little use to the political, strategic, and military leadership in India.

The core problem, as Operation Sindoor recently revealed, is that India has to contend not just one opposing army but many hostile armies.

There is the mighty China on the northern border that is five times the size of India in terms of GDP. There is the belligerent Pakistan which is much smaller and weaker than India but defines its very existence on the basis of “jihad” against India. As if that were not enough, our eastern neighbour Bangladesh too has turned openly hostile. Even more sobering: barring a handful, no country in the world will go beyond platitudes and lip service if there is a military conflict provoked and inflicted by hostile neighbours.

In short: India stands alone and must devise a strategy to simultaneously tackle a bunch of hostile nations living next door.

Hostile Neighbours

Barring the 1962 debacle against China when an unprepared and overconfident India was humiliated by the Chinese military, the Indian armed forces have performed exceptionally well despite lack of resources and the most modern equipment and arms. But no matter how perceptive, forward-looking and strong our strategic and military neighbours are, it all boils down to money and resources at the end of it.

In a previous column in The Quint on Operation Sindoor, the authors had argued how growing economic and financial muscle was helping India make Pakistan an irrelevant (barring nuclear blackmail) factor in the future. But that logic goes for a toss when it comes to preparing for a potential war with China.

In this scenario, it is China that holds the decisive edge and lead when it comes to economic and military muscle.

The only way India can avoid a war with China in the future is the leadership of China is convinced that the costs and damage to the Chinese economy and military will be unacceptably high even if it repeats the 1962 show, which arguably is unlikely to happen.

Defence Expenditure ($): How China Outflanks India

Source: SIPRI

The chart above clearly reveals the wide gulf between China and India on military spending. In fact, most credible institutions like the Stockholm based SIPRI and the World Bank are of the opinion that China could actually be spending far more than the “publicly revealed” numbers on defence.

For the foreseeable future, China will continue to outspend India on a massive scale. India has to live with that reality. But as the authors pointed out, the only way to prevent Xi Jinping from opting for a war with India is the realisation that the costs for China will be unacceptably high.

India has to urgently increase its military/defence budget to convince China that a war would be futile. Currently, India spends about 1.7 percent of its GDP on defence.That needs to go up to 3.5 percent as quickly as possible.

Identifying Needless Spending

The Indian economy and the exchequer are no longer impoverished entities as they were till the end of the 20th century.

The authors are convinced that cutting back on needless subsidies could generate funds for a big jump in defence spending.

For instance, providing free food to millions of citizens and spending upwards of Rs 2.5 lakh crores each year may be a miscalculated excess. Various estimates point to only around 300 million Indian citizens who used to be bracketed in “extreme poverty” and may still need the food security program. And yet, India currently provides free food to over 800 million.

It is totally understandable that in the Covid-19 lockdown, this food security program was critical to ensure that a massive section of the Indian population does not slide back into a hunger-ridden scale of poverty. It gave confidence to India and boost its image as a system where hunger deaths were thing of the past. Now that we are well past the pandemic disaster, surely a better-targeted scheme can be devised to reach only those who genuinely live with food insecurity.

For example, as per the World Bank's definition of poverty measured on expenditure of 3.65 USD/day (for a family of four, this would be 14 USD), under this measure also barely one-fourth of Indians are poor, which is close to 300 million. Right now, we are giving free food to almost three times that number.

A smart communication strategy is needed to convince Indians of this necessity. There are numerous strategists wiser and more knowledgable than the authors who can come up with better ideas on how to ramp up defence spending.

Please remember millions of Indians had voluntarily given up their LPG subsidy, only on one single request in ‘Mann Ki Baat’ by the Prime Minister.

But merely increasing spending is not enough. As the Americans say, there has to be more bang for every buck. A prime example of how not to spent smartly on defence has been seen for decades till the Agniveer scheme was launched amidst so much controversy and manufactured outrage.

Pensions as Percentage of Defence Spending

Source: MOSPI

The chart above shows how expenditure on pensions kept ballooning over the decades. There is little doubt that professional soldiers deserve the best, including pensions. But the expenditure has to be sustainable.

For anyone with common sense, it was clear that pensions would gobble up more than 40 percent of the defence budget if India persisted with the old system.

The Agniveer scheme does need many tweaks and improvements. But it has successfully addressed the elephant in the room: if most of the money goes to fund pensions, what will be left to invest in modern artillery, ships, aircraft and air defence systems?

Going ahead, India will have more money even within existing budgets to invest in modern equipment. An increase from existing levels to 3.5 percent will leave room for enormous investments. And the icing on the cake, as demonstrated during Operation Sindoor, is that home grown and domestically manufactured armed forces supplies are coming of age.

As we know for sure, the two things which worked extremely well for India in the recent stand off with Pakistan were our indigenous Air Defence System AkashTeer and the BrahMos. Both are ‘Made in India’ for all practical matters, and that is the way to go.

Cut the Red Tape

For decades we have been suffering from the short-term planning and bureaucratic delays in defence procurement and investments. And we also know that no superpower has ever been sustainable with outsourced equipment and operations.

Defence is NOT a sector where open market and BPO systems are applicable.

The fact that India has been dealing with a hostile state which has been using equipment supplied to them by our so-called “friendly democracies” exposes the flaws of this open market approach. Such an approach to defence works only if you're a 'seller' of these equipments, not the ‘buyer’. Defence is not a sector for that kind of marketing unless you are a producer of equipment yourself.

Many readers would remember how the lack of support in the ‘cryogenic engines’ had pushed back our space program by years, if not decades.

But the sustained push for excellence and investment without any political interference has made the Indian Space Research Organisation (ISRO) the success that it is today. One doesn't really need to underline the fact that rocket technology remains rocket technology, no matter if it is used for launching satellites or launching missiles.

The next generation of warfare on planet earth will have more to do with what we do in space than what we do on earth.

An overwhelming majority of Indians would prefer improved relations with Pakistan, China, and Bangladesh. Yet, it needs to be prepared for a scenario where their leaders remain implacably hostile.

This simply gives us the only option to defend ourselves: invest more on defence, but mostly for our own in-house ‘production’. A short-term approach only aiming at ‘acquisition’ has been disastrous and the fundamental change of doctrine for ‘¸Atmanirbhar Bharat’ in defence sector is a welcome move. We just need to make sure that it remains a good balance of private sector and government mechanisms.

An aggressive ISRO is most welcome, but a white elephant like HAL is not.

Not many know the history of HAL that it was private profitable entity making war planes for the British Armed forced till WW2. It was only after it got ‘nationalised’ after independence that the PSU work culture made sure it became a white elephant.

To err is human, but to repeat would be insane.

(Yashwant Deshmukh and Sutanu Guru work with the CVoter Foundation. This is an opinion piece and the views expressed are the authors' own. The Quint neither endorses nor is responsible for them.)