Rebooting the Defence Budget
There is a strong case for abandoning the present approach of looking at the defence budget through the narrow prism of allocation and utilisation, and instead focus on outcomes.
- Amit Cowshish
- February 28, 2017
India spends a significant amount of resources on its national defence. Efficiency in utilisation of resources is not only an economic imperative but vital for defence preparedness. In view of this, the Defence Economics and Industry Centre was created in 2006 to promote research on various economic aspects of India’s defence. Since its inception, the Centre has undertaken a number of policy relevant studies besides constantly engaging vital stakeholders (Ministry of Defence, Armed Forces and Industry) on a range of issues. The major focus areas of the Centre are:
No posts of Books and Monograph.
No posts of Jounral.
There is a strong case for abandoning the present approach of looking at the defence budget through the narrow prism of allocation and utilisation, and instead focus on outcomes.
The objective of asking these question should be to elicit information that generates a well-informed debate on, and facilitates the result-oriented monitoring of, the MoD’s handling of matters related to the defence budget.
On 5 February 2017, a version of the Hawk Advanced Jet Trainer (AJT) was unveiled. The aptly-named “Advanced Hawk” is a joint-venture between BAE Systems and Hindustan Aeronautics Limited (HAL). It has been developed using internal funds on an equal risk basis and offers significant enhancement of the capabilities of the basic Hawk AJT.
There is a plethora of evidence to show that the problem of establishing a Defence Modernisation Fund does not lie with any ‘rules of business’, but instead with its merit and workability.
The share of defence expenditure in 2016-17 has gone below the levels it was in 1955-56. In 2017-18 it will go down to 1.557 per cent of GDP.
Budget is not just all about figures but also a statement of policy. The Defence Budget for 2017-18 contains no hint of any intention of the government to bring about a paradigm shift in the defence policy.
There is a need to go beyond stale issues and have a more meaningful and dispassionate discussion on how to make the best use of the allocations made for defence.
The BEML model of disinvestment needs to be applied to the rest of the Defence Public Sector Undertakings as well as Ordnance Factories.
With some innovative thinking, on-line arrangements with suppliers, including the Canteen Stores Department, could reduce the cost of storage and distribution and, more importantly, help in maintaining a high satisfaction level among troops.
Higher Defence Management, Civil-military relations and force modernisation were three critical areas in which there was little or no movement in the year gone by.