If the defence expenditure relationship to the GDP of 1.65 per cent is maintained, we may see a budget estimate (BE) for defence expenditure of Rs. 285,000 crores, against the current year BE of Rs. 249,099 crores.
The presentation of the Union budget on February 1 is expected to ensure full utilisation of allocated funds and will ensure that ‘New Schemes’ can be processed, approved and contracted from April 1, 2017.
The past decade, and in particular the Twelfth Plan period, have been challenging times for the Indian defence budget. Strategic foresight demands that India’s military strength and capabilities relate to diverse challenges by way of a not unlikely two-front war, the attendant imperatives for a ‘Cold Start’ capability, non-conventional challenges from non-state actors, counter-terrorism capabilities and unavoidable internal security responsibilities.
The Army needs to comprehensively review the existing SoP for this exercise, liaise with MORTH and NHAI and jointly develop a software which can generate traffic data reports that would be accurate and useful for its planning purposes.
The underutilisation of allocated funds suggest that the meagre funds available in the modernisation budget after catering for committed liabilities have not been fully utilised. Thus, a thorough introspection for better expenditure management is needed.
Sustaining and building defence capabilty is a continuous process. It requires both adequate budget allocations and full, efficient and judicous utilisation of the allocated budget. This does not appear to have happened in the immediate past and the trend appears to continue in the current year.
It is a fairly simple exercise to estimate what the defence budget will be given available indicators. My assessment is that the Budget Estimate for defence is likely to be around Rs. 250,000 crore, with 105,000 crore for Capital Expenditure and 145,000 Crore for Revenue Expenditure.
It is necessary to evolve a long term strategy keeping in mind all the aircraft acquisition programmes, review the factors that contribute to determining the right numbers and begin the process of building a long term partnership with the private industry.
The bad news in this year’s defence budget is that it does not recognise that things are not going in the right direction but only the beaten track. And the poor track record in fully utilising the resources allocated for ‘Modernisation’ is the worse news.