FAQs on 34% Jump in Indian Military Budget

Last year, India decided on a massive 34% increase year-over-year in its defense spending. Here are some frequently asked questions and answers about this dramatic move that puts India among the world's biggest spenders on defense.

Q1: How much does India really spend on defense?

A1: On paper, India spends $32.7 billion, about 3% of its GDP on defense, after an increase of 34% for 2010.

In reality, India spends closer to 3.5% of its GDP on defense.

Here's what Col.(Retd) Pavan Nair of the Indian Army has to say about it in a recent guest post on Haq's Musings:

India's own specified limit of 3% has been observed only by excluding several items like the cost of the MoD and the expenditure on military pensions which by itself amounts to 15% of the total defense outlay. Several other items like the Jammu and Kashmir Light Infantry (JAKLI, a regular regiment of the army consisting of thirteen battalions) and the Coast Guard are also excluded. A substantial part of the cost of the nuclear arsenal and allied systems is excluded. All para-military forces including the ones directly involved in border management are excluded. The Parliamentary Committee on Defense spends most of its time on personnel matters and resolving issues of protocol between the service chiefs and the defense secretary. The Committee looks at DE but beyond stating that DE should be pegged at 3% of GDP, it has nothing substantial to contribute. Clearly, parliamentary oversight and control seems to be missing. For several years, DE in aggregate has crossed 3% of GDP.



Pakistan spends about $4.3 billion annually, less than 3% of its GDP, and there has been no real increase year-over-year in 2010. There was a 10.15 per cent nominal increase from Rs 311.303 billion revised defense budget for 2009-2010. In real terms, however, it represents a decrease because inflation in Pakistan exceeds nominal increase in defense. Pakistan’s defense allocation does not include foreign assistance, which is expected add about a billion dollars to defense spending for operations against Taliban insurgents. The aggregate $5.5 billion of military spending by Pakistan accounts for about 3% of its $ 175 billion GDP.

“The war on terror has already cost us over $35 billion since 2001-02. We now face the prospects of incurring huge expenditure on account of counter-insurgency,” according to Pakistan's deputy finance minister Hina Rabbani Khar.

Q2: Doesn't India need to spend more on defense to fight the terrorists in the region?

A2: The military brass in India used the Mumbai attacks in late 2008 to argue for and win a 34% increase in defense budget. But terrorism is just an excuse by Indian military to get large funds and buy expensive cold war era weapons which are useless against the asymmetrical threat from the terrorists any way. It lines the pockets of the arms dealers (and a few corrupt generals and officials) without increasing India's security against potential terror attacks.

The 34% increase can not be explained by Indian military pay hikes either, given India's huge weapons' shopping list and its status as one of the biggest importers of military hardware in the world. The real aim is to intimidate India's neighbors, and assert India's hegemony. But it won't work as long as India has serious challenges of poverty, illiteracy, hunger, social inequity and multiple insurgencies at home by its most impoverished citizens.

Q3: Won't India just grow out of poverty, hunger, illiteracy through rapid economic expansion of its economy?

A3: Over a decade of rapid economic growth in India has done little to help its poor, hungry and illiterate population.

India has miserably failed to use a period of high economic growth to lift tens of millions of people out of poverty, falling far short of China’s record in protecting its population from the ravages of chronic hunger, United Nations officials said recently. In 2008, British Development Minister Alexander contrasted the rapid growth in China with India's economic success - highlighting government figures that showed the number of poor people had dropped in the one-party communist state by 70% since 1990 but had risen in the world's biggest democracy by 5%.

In the context of unprecedented economic growth (9-10 percent annually) and lack of national food security, over 60 percent of Indian children are wasted, stunted, underweight or a combination of the above. As a result, India ranks number 62 along with Bangladesh at 67 in the PHI (Poverty Hunger Index)ranking out of a total of 81 countries. Both nations are included among the low performing countries in progress towards MDG1 (Millennium Development Goals) with countries such as Nepal (number 58), Ethiopia (number 60), or Zimbabwe (number 74).

Ranked at 45 on PHI index, Pakistan is well ahead of India at number 62, and it is included in the medium performing countries. PHI is a new composite indicator – the Poverty and Hunger Index (PHI) – developed to measure countries’ performance towards achieving MDG1 on halving poverty and hunger by 2015. The PHI combines all five official MDG1 indicators, including a) the proportion of population living on less than US$ 1/day, b) poverty gap ratio, c) share of the poorest quintile in national income or consumption, d) prevalence of underweight in children under five years of age, and d) the proportion of population undernourished.

Q4: Why can't India do both: Increase defense spending and reduce poverty, illiteracy, hunger and disease?

A4: Defense spending should not be a sacred cow. Huge increases shouldn't get approved with little or no debate, and there should be much greater oversight of how it's spent.

It needs to be discussed and debated rationally in the parliament and the media.

What I find is that there is more debate and discussion in Pakistan on defense spending than there is in India, in spite of the fact Pakistan is fighting a war against determined insurgents in the North West.

In spite of its many other urgent issues like access to food, education and health care, it's a shame that a huge 34% boost in defense budget got approved in India without much serious discussion. A similar dramatic increase in Pakistan would have elicited howls of protest and loud demands to curtail it.



Q5: Why should there be any discussion or debate in India on defense budgets when there is consensus among all political parties that military spending should increase?

A5: That may be a good explanation of lack of debate, but the size of the increase at 34% year over year should be too big to slide through parliament without much scrutiny. And it's strange that there is no such consensus on similar spending increases on food, health care, education and poverty alleviation where India lags behind many of its neighbors.

In 2008, Indian Planning Commission member Syeda Hameed acknowledged that India is worse than Bangladesh and Pakistan when it comes to nourishment and is showing little improvement.

Speaking at a conference on "Malnutrition an emergency: what it costs the nation", she said even Prime Minister Manmohan Singh during interactions with the Planning Commission has described malnourishment as the "blackest mark".

"I should not compare. But countries like Bangladesh, Pakistan and Sri Lanka are better," she said. The conference was organized last year by the Confederation of Indian Industry and the Ministry of Development of Northeastern Region.

According to India's Family Health Survey, almost 46 percent of children under the age of three are undernourished - an improvement of just one percent in the last seven years. This is only a shade better than Sub-Saharan Africa where about 35 percent of children are malnourished.

Unlike Indian military which got 34% increase this year, there is no one talking about a similar spending increase for human development in a nation that is slipping to lower ranks in human development. In fact, the latest Human Development Report for 2009 shows that all major South Asian nations have slipped further down relative to other regions of the world. Pakistan's HDI ranking dropped 3 places from 138 last year to 141 this year, and India slipped six places from 128 in 2008 to 134 this year.

The total per-capita expenditure on health (central as well as state expenditure) is about a third of the per-capita expenditure on defense in India. This low level of funding is the prime reason for poor health parameters which in turn keeps a large proportion of the population in perpetual debt and poverty. The UN millennium development goals pertaining to mortality rates and poverty are not likely to be achieved mainly on account of poor spending and delivery in the health sector. The allocation for federal spending on health in the current year is Rs 22,641 crores or merely 0.4% of GDP.

Q6: Why Is the Indian defense spending any of this blogger's business?

A6: India's military spending directly affects the entire south Asian region. It increases the threat perception in the neighborhood, particularly when the Indian military brass engages in threatening rhetoric in the midst of its huge arms buildup. It distorts the spending priorities of Pakistan, a smaller neighbor which was invaded and divided by India in 1971.

Recently, Lt-General A S Lamba of Indian Army has been quoted by the Indian media as boasting about a "massive thrust into Rawalpindi to quiet Pakistanis within 48 hours of the start of assault." Indian Army chief General Deepak Kapoor has said India is ready for a “the successful firming-up of the cold start strategy (to be able to go to war promptly) in the multiple fronts against multiple different militias at the same time.” General Kapoor has talked about taking on China and Pakistan at the same time.

India has over 6000 tanks, and it is inconceivable that these tanks will roll over the Himalayas to invade China. These tanks are meant to invade Pakistan in the plains of Punjab and the deserts of Sind. Indian Army has 33 infantry divisions. Twenty-four are on Pakistan borders. It has three armored divisions, all three are positioned near Pakistan borders. There are three mechanized divisions in India, all three are on Pakistan borders.

Related Links:

South Asia Slipping in Human Development

India's Defense Budget: Guns Versus Butter

Indian Military Brass Challenges China and Pakistan

India's Defense Spending: Facts Beyond Figures

Pakistan's Defense Budget

World's Top Arms Importers

PHI Poverty Hunger Index

Comments

Riaz Haq said…
Here's an interesting commentary by Sudha Ramachandra about India's future prospects:

The populations of Europe and Japan are already graying, and the working-age populations of the United States and China are projected to shrink too in the next two decades. By 2020 the US will be short 17 million people of working age, China 10 million, Japan 9 million and Russia 6 million. However, India will have a surplus of 47 million people, giving the country a competitive edge in labor costs, which will be sustainable up to 2050, according to a study by Goldman Sachs.

Economists say India will catch up with the Chinese economy beginning in 2030, when the latter could cool off as the result of an aging population. "The window of opportunity offered by a population bulge has clearly opened for India," points out noted economist C P Chandrasekhar of Jawaharlal Nehru University in New Delhi. After decades of evoking despair, India's demographic profile is finally beginning to stir hope.

But not everyone views the population bulge with such optimism. Some analysts say it is not enough to have a young population. The working-age population needs to be healthy and literate.

India's score on this, while improving, is certainly not inspiring. About 50% of all Indian children are undernourished, a large percentage of them born with protein deficiency (which affects brain development and learning capacity, among other things). This is hardly the ideal foundation for a productive workforce, as the likelihood of a malnourished child growing up to be an able adult is rather dim.

There is also the question of whether the population has the skills and knowledge to take on India's future work. Literacy has improved dramatically over the years - just 14% of the population was literate in 1947 versus about 64.8% today - but many who are classified as literate can barely read or write. And 40% of those who enroll in primary schools drop out by age 10. The curriculum in the schools, especially the government-run ones, does not prepare the child for the domestic job market, let alone the global one. The huge "workforce" might not be qualified to do the work.

Moreover, India's rich and educated classes are preferring to have small families, so the additions to the population are coming largely from the poor, illiterate sections in society. Nicholas Eberstadt, who researches demographics at the Washington-based American Enterprise Institute, points out that while India's overall population profile will remain relatively youthful, "this is an arithmetic expression averaging diverse components of a vast nation. Closer examination reveals two demographically distinct Indias: the north that stays remarkably young over the next 20 years, and a south already graying rapidly due to low fertility."
Riaz Haq said…
Pranab Mukherjee has just revealed the outlines of India's 2011 budget.

I think the double digit increases of 24% and 20% on education and health care in 2011 Indian budget are a much-needed welcome change.

What is not reassuring, however, is the fact that social spending still lags defense in India, a country with the world's largest population of poor, hungry, illiterate and sick people.
Riaz Haq said…
If the past is any guide, it's quite safe to assume that Pakistan will continue to effectively respond to all military threats to its security and assert its power ...be it nukes, missiles, satellites, fighter jets, drones, nuke subs, etc. Talking about India's nuke sub, it's just a matter of time before Pakistan launches its own nuclear subs to complete the nuclear triad. Let there be no doubt on this point.

http://www.riazhaq.com/2009/03/pakistans-growing-defense-industry.html

When it comes to eating grass to build nukes, all of the available data from international sources shows that many Indians can't even find grass to eat, as hundreds of millions of Indians go to bed hungry every night.

Here's a quote from Times of India poking fun at the superpower claim:

With 21% of its population undernourished, nearly 44% of under-5 children underweight and 7% of them dying before they reach five years, India is firmly established among the world's most hunger-ridden countries. The situation is better than only Congo, Chad, Ethiopia or Burundi, but it is worse than Sudan, North Korea, Pakistan or Nepal.

Today India has 213 million hungry and malnourished people by GHI estimates although the UN agency Food and Agriculture Organization (FAO) puts the figure at around 230 million. The difference is because FAO uses only the standard calorie intake formula for measuring sufficiency of food while the Hunger Index is based on broader criteria.


http://articles.timesofindia.indiatimes.com/2012-01-15/india/30629637_1_anganwadi-workers-ghi-number-of-hungry-people
Riaz Haq said…
Here's a DefenseNews report on Pakistan's rumored nuclear submarine project:

...Mansoor Ahmed, a lecturer at Islamabad’s Quaid-e-Azam University who specializes
in nonconventional weapons and missiles, believes the reports are the result of a
calculated leak by the Navy, and that a message may be being sent to India.

“This news … appears to be some kind of signaling to the Indians seeing as they are taking delivery of a new nuclear-powered
submarine from the Russians as well as their own Arihant Class SSBN,” he said.

“So Pakistan is signaling to the Indians that they are mindful of these developments and taking due measures in response.”

Ahmed said he has for some time believed Pakistan was working on a nuclear propulsion system for submarine applications and that Pakistan already has a functional submarine launched variant of
the Babur cruise missile.

The Babur cruise missile is very similar to the U.S. BGM-109 Tomahawk, and perhaps derives at least some technology from Tomahawks which crashed in Pakistan
during U.S. strikes on al-Qaida training camps in Afghanistan in 1998. It can be armed with conventional or nuclear
warheads.

Ahmed believes Pakistan is now gearing up to build its own SSN/SSGN flotilla as a way
of deterring India and maintaining the strategic balance in South Asia.

However, in the long term in order to fully ensure the credibility of its deterrent Ahmed said he believes Pakistan should
build ballistic missile submarines.


http://www.defensenews.com/article/20120211/DEFREG03/302110003/Pakistani-Navy-Develop-Nuclear-Powered-Submarines-Reports?odyssey=tab|topnews|text|FRONTPAGE
Riaz Haq said…
Here's an AFP story on Indian Army chief's leaked memo:

India’s tank fleet lacks ammunition, its air defences are “97 percent obsolete” and its elite forces lack essential arms, the country’s army chief wrote in an explosive letter leaked Wednesday.

The letter to the prime minister dated March 12 – widely reported by the Indian media – lists the shortcomings of the armed forces in embarrassing detail in a blow to the government and the Asian giant’s military prestige.

Its publication also ups the stakes in a public battle between army chief General VK Singh and the government which began with a dispute over Singh’s retirement earlier this year.

“The state of the major (fighting) arms i.e. mechanised forces, artillery, air defence, infantry and special forces, as well as the engineers and signals, is indeed alarming,” Singh wrote in the letter, DNA newspaper reported.

The army’s entire tank fleet is “devoid of critical ammunition to defeat enemy tanks”, while the air defence system is “97% obsolete and it doesn’t give the deemed confidence to protect… from the air,” he wrote, according to DNA.

The infantry is crippled with “deficiencies” and lacks night fighting equipment, while the elite special forces are “woefully short” of “essential weapons”.

Singh also told The Hindu newspaper this week that he had informed Defence Minister A.K Antony of a $2.8 million bribe offered to him in 2010, leading to embarrassing questions as to why the government did not order an enquiry.

Antony told parliament on Wednesday that he was aware of the letter to Prime Minister Manmohan Singh and he would reply appropriately.


http://tribune.com.pk/story/356360/leaked-letter-reveals-indias-military-weaknesses/
Riaz Haq said…
Here's an AFP report on Pakistan arms imports:

China’s arms exports in 2008-2012 grew by 162% compared to the previous five years, with most of them — 55% — going to Pakistan.

“China’s rise has been driven primarily by large-scale arms acquisitions by Pakistan,” Paul Holtom, a research director at SIPRI said in a press release.

“A number of recent deals indicate that China is establishing itself as a significant arms supplier to a growing number of important recipient states.”

Pakistan has long been China’s key ally in South Asia. The report also named Myanmar, Bangladesh and Venezuela as importers of Chinese arms.

China has defended its rules on overseas weapons sales following the report. Foreign ministry spokesman Hong Lei said Monday that such sales follow domestic laws and UN guidelines.

Hong said weapons sales have to be justified by the legitimate needs of the recipient and must not harm peace, security or stability.

Islamabad confirms
The Inter Services Press Relations (ISPR) directorate, the public relations wing of the Pakistan military has confirmed that China is “one of Pakistan’s biggest partners” in terms of cooperation in the defence field.

In 2010, Pakistan signed agreements worth over $10 billion with China, many of which were linked to cooperation in the field of defence.

But the ISPR did not confirm whether China is the biggest partner and whether Pakistan’s imports most of its defense equipment from China.

“We have three major partners. These are the US, China and France.”

General (retd) Talat Masood, a defence analyst, said that his belief was that US continues to remain the main source of Pakistan’s defence hardware.

“I think given the ongoing military arrangements with the US, it is still Pakistan’s No 1 source for military hardware. This also includes money spent on military programs by the US government.”


http://www.hindustantimes.com/world-news/China/Pakistan-buys-55-of-China-s-arms-exports/Article1-1028561.aspx
Riaz Haq said…
Here's an Op Ed piece in The News by columnist Farrukh Saleem:

Myth 1: The allocation for defence is the single largest component in our budget. Not true. The single largest allocation in Budget 2013-14 went to the Public Sector Development Programme (PSDP). The second largest allocation in Budget 2013-14 went to servicing the national debt. The third largest government expenditure, including off the budget allocations, are the losses at public-sector enterprises (PSEs). Yes, the fourth largest government expenditure goes into defence.

Myth 2: The defence budget eats up a large percentage of the total outlay. Not true. In Budget 2013-14, a total of 15.74 percent of the total outlay was allocated for defence. PSDP and debt servicing were 30 percent each. What that means is that more than 84 percent of all government expenditures are non-defence related.

Myth 3: The defence budget has been increasing at an increasing rate. Not true. In 2001-02, we spent 4.6 percent of our GDP on defence. In 2013-14, twelve years later, our defence spending has gone down to 2.7 percent of GDP.

Myth 4: We end up spending a very high percentage of our GDP on defence. Not true. There are at least four dozen countries that spend a higher percentage of their GDP on defence.

They include: India, Egypt, Sri Lanka, the United States, the United Kingdom, South Korea, France, Eritrea, Oman, Saudi Arabia, Israel, Jordan, Liberia, Brunei, Syria, Kuwait, Yemen, Angola, Singapore, Greece, Iran, Bahrain, Djibouti, Morocco, Chile, Lebanon, Russia, Colombia, Zimbabwe, Turkey, Georgia, Guinea-Bissau, Ethiopia, Namibia, Guinea, Turkmenistan, Kyrgyzstan, Algeria, Serbia and Montenegro, Armenia, Botswana, Ukraine, Uganda, Ecuador, Bulgaria, Lesotho and Sudan.

Myth 5: The Pakistan Army consumes the bulk of the defence budget. Not true. In the 1970s, the Pakistan Army’s share in the defence budget had shot up to 80 percent. In 2012-13, the Pakistan Army’s share in the defence budget stood at 48 percent.

Now some facts:

Fact 1: The Pakistan Army’s budget as a percentage of our national budget now hovers around eight percent.

Fact 2: Losses incurred at public-sector enterprises can pay for 100 percent of our defence budget.

Fact 3: Pakistan’s armed forces are the sixth largest but our expenses per soldier are the lowest. America spends nearly $400,000 per soldier, India $25,000 and Pakistan $10,000.

Fact 4: Of all the armies in the world, Pak Army has received the highest number of UN medals. Of all the armies in the world, Pak Army is the largest contributor of troops to the UN peacekeeping missions.

Mark Twain once remarked, “Get your facts first, and then you can distort them as much as you please.”


http://www.thenews.com.pk/Todays-News-9-246627-Defence-budget

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