How much should India spend on defence?

[Major Shaitan Singh]

Thank you for Including me !! Nice thread but difficult / tricky to guess without knowing the actual requirement of the Armed Forces.

I would Say
7% of GDP from 2016 -2020. Invest huge in R&D and MAKE IN INDA.
5% of GDP from 2020 - 2030 and so on....

Why
In last 10 under Mr. Anthony Defence force only got tom tom.
We need a complete restructuring of the Armed Forces. Army Navy and Airforce

Army
We are still with WW1 helmets, We need Bulletproof one with Radio. Night Vision Goggles.
We are shot of More than 2LK bullet Proof Jackets. We are still using Soviet era heavy one.
Our Rifle Jams after continuous 10 round fire. Nozzle becomes very hot.
We are using a Backpacks from WWII era. Boots, Clothes, Jackets, Ration, Tents all need to be modernized.
Indigenous has become a Joke and DRDO really need a shake up. Chairman should be retired from Armed force not some Scientist or IAS.
Artillery Support, Tanks (Arjun has become a Joke),, MBRL, Choppers (Light, Heavy, Armed) Need in large quantity.
Fire Location and Battlefield Management Radar. Deep Bunkers,
Strategic Armed Command Center for Army need a really Shake up.
Proper Training and Simulation for Battle field Management System and coordinating and guiding Airforce to Target Location.

Airforce

We are Still living in 70s as most of the Aircraft from that era.
All MiG under 29K should be retired and we need Rafale and lots of them.
Change the Management for LCA and screw the existing Scientists and Engineers to buckle up.
Air defence need a tremendous improvement. New SAM required to protect Air Base and Critical Assets.
AAD and PAD should be inducted and regular test with our own existing missile (Test both Air-defence Maneuver and evasion) whack the looser.

Navy

Is the only force that is getting modernized.
Submarines are from Soviet era we need 2 dozen of them (we need to focus one built abroad and one in home)
Atleast 4 New Submarine every year, Korean, Japanese, French and German should be given Priority.
Import Korean Version Aegis ship defence system.
Under water unmanned Vehicles, Unmanned UAV patrolling round the clock
We have large costal area unprotected. Build Shore based defence system.

These are some of the Major Shakeup required.

 

[Manindra]

Thank you for Including me !! Nice thread but difficult / tricky to guess without knowing the actual requirement of the Armed Forces.

I would Say
7% of GDP from 2016 -2020. Invest huge in R&D and MAKE IN INDA.
5% of GDP from 2020 - 2030 and so on....

Why
In last 10 under Mr. Anthony Defence force only got tom tom.
We need a complete restructuring of the Armed Forces. Army Navy and Airforce

Army
We are still with WW1 helmets, We need Bulletproof one with Radio. Night Vision Goggles.
We are shot of More than 2LK bullet Proof Jackets. We are still using Soviet era heavy one.
Our Rifle Jams after continuous 10 round fire. Nozzle becomes very hot.
We are using a Backpacks from WWII era. Boots, Clothes, Jackets, Ration, Tents all need to be modernized.
Indigenous has become a Joke and DRDO really need a shake up. Chairman should be retired from Armed force not some Scientist or IAS.
Artillery Support, Tanks (Arjun has become a Joke),, MBRL, Choppers (Light, Heavy, Armed) Need in large quantity.
Fire Location and Battlefield Management Radar. Deep Bunkers,
Strategic Armed Command Center for Army need a really Shake up.
Proper Training and Simulation for Battle field Management System and coordinating and guiding Airforce to Target Location.

Its Ironic that a Indian company MKU didn't find any market in India & they have to supply to NATO their gears.
Even TATA & Ashok Leyland trucks assembled by VFJ Jabalpur from CKD which cost more than companies price.
First we need to disband OFB should absorbed between specific field PSUs like HVF Avadi & VFJ Jabalpur should be merged in BEML, Ammunition factories should be merged with BDL, Gun factories should be form a separate company or merged with some suitable company.
DRDO's laboratories should be given to respective companies like ADA to HAL, CVDRE to BEML & so on & they have only given task to develop technology not product.

 

[Mitro]

First reduce the size of army
Second let arm forces decide what kind of weapon system they want and then collaborate with manufacturer with tot made in India
Third make good relation with China
Don't make China angry by working with US
Secure your neighborhood with good relationship except Pakistan

 

[kurup]

IMO they should fix it at 2% of GDP for this decade atleast and more importantly spend the entire amount allotted for a fiscal .

 

[Chanakya's_Chant]

Out of curiosity, when is this end? When can Modernization be "finished?" It didn't end with T-90s, type 99 and even Armada or F-22, J-20 and FGFA, I doubt it's ever going to end.

So how can you hike it up a few years and then decrease? Today's treasure is tomorrow's garbage.

It has more to do with the capital expenditure than with the entire budget - This year's defence budget at Rs. 2,46,727 crore (US$ 40.4 billion) amounts to a 7.7 per cent increase over the previous year’s allocation but this year’s capital budget is Rs 94,588 crore, coincidentally the same figure as last year’s capital allocation. Capital spending remains the same - it's the revenue expenditures that are rising on account of soldier welfare schemes such as one rank one pension scheme which have nothing to do with the armed forces modernization.

All services have different revenue to capital expenditures. Last year IA's was 85:15, IN's was 41:59 and IAF's was 39:61. As Indian Indian Navy has indigenized the most so it modernizes most efficiently as all of its vessels are built/being built in domestic shipyards. IAF is still better though it's modernization remains a concern - MMMRCA might have been stagnant but in the meanwhile it upgraded it's fighter inventory and added more punch to it's transport fleet. But it is really horrible when it comes to the army which spent an alarming 82 paise of every rupee as revenue expenditure and just 15 paise of each rupee as capital expenditure last year.

Ajai Shukla: Needed - defence budgeting structures | Business Standard Column

@Abingdonboy We need to follow the global trend and spend 2.5% of its GDP on defence while increasing the capital allocation as world's GDP % spending on defence also happen to be 2.5%. India needs to have double digit defence expenditure growth for a decade or so in order to address the widening gap between MoD’s resource projection and allocation with an average GDP growth of not less than 8%.

Widening Gap between MoD’s Resource Projection and Allocation​

India is projected to achieve its highest annual GDP growth rate of 7.9 percent over next 8 years which means a 2.5% annual GDP spending for the next 8 years is very much possible if pursued by the GoI honestly.

India will achieve 7.9% GDP growth by 2023, overtake China: Harvard study - Firstpost

But I don't think so the GoI will make it happen especially concerning the capital expenditure - We might have have hiked our defence budget by 7.7% this year but the fact is that this year’s capital budget at Rs 94,588 crore, is coincidentally the same as last year’s capital allocation. It's the capital expenditure that is required to be raised!

Some observations form the 14th Finance Commission’s Report which gives us an insight in how the GoI plans to spend on defence -

>> The Commission has recommended the allocation of 42 per cent of the central government’s tax revenues to the States. The magnitude of this hike can be gauged from the fact that in the past when finance commissions have recommended an increase in states’ share, such increases were invariably in the range of one to two per cent.

>> The quantum jump in the devolution of tax revenues to the states would mean a proportionately reduced fiscal space for the central government. At the same time, the government also decided to discontinue only eight centrally sponsored schemes as against 32 schemes suggested by the Finance Commission. This further squeezes the fiscal space available to the centre.

>> Given this, the hard reality is that defence has to compete with other sectors to maintain its share in what has now become a smaller central pie.

>> In addition, defence is also likely to be impacted by the roadmap suggested for it by the 14th Finance Commission. It is to be noted, however, that unlike the 13th Finance Commission which had given a roadmap covering both revenue and capital expenditure, the 14th Finance Commission has limited its projection to defence revenue expenditure only, arguing that capital expenditure is “beyond the scope of our assessment.”

>> As per the roadmap, revenue expenditure is projected to grow by 13.5 per cent per year till 2019-20. However, while projecting this growth rate, the Commission has kept the revenue expenditure-GDP ratio at a constant 1.04 per cent, so as to allow revenue expenditure to grow at the same rate as the nominal GDP. In other words, if nominal GDP grows faster than 13.5 per cent (the growth rate assumed by the Commission for the projected period), revenue expenditure would also grow that much faster. At the same time, the converse is also true. Given this, the defence ministry would now hope that nominal GDP grows faster than 13.5 per cent in the remaining years of the projected period so that revenue expenditure remains in a healthy situation. Currently the Nominal GDP Growth Rate is 11.5% (2014-15).

​

>> The stagnation of capital expenditure, which is crucial for building new capability, would further delay the on-going modernisation process. Having said that, the latest defence allocation has to be seen in the light of the new centre-state fiscal relations in which the fiscal space of the central government has shrunk due to the implementation of the report of the 14th Finance Commission. From both the short- and long-term perspectives, this is a major cause of concern for sectors like defence, which are completely dependent on the central government for their resource requirement.

>> What is more significant is that if the fiscal space does not widen rapidly in the future due to subdued growth in revenue collection (as has been the case in 2015-16), defence will have very little for augmenting its capital assets. As evident, the entire increase of Rs. 17,727 crore in the 2015-16 defence budget would be consumed by revenue expenditure, with manpower costs accounting for nearly half of it. Given the new fiscal reality, the government has to ponder seriously if such a situation – wherein extra funds allocated in the budget do not go towards capital expenditure – can be allowed to persist.

References - 14th Finance Commission: Recommendations | Business Standard News
Broadsword: Defence budget up marginally, after having failed to spend current year’s allocations
:: Finance Commission, India ::

To conclude I am not too optimistic for India's Capital Spending on Defence and the subsequent modernization of Indian Armed Forces especially the Army even though the Defence Budget may rise in overall terms.

Sorry I lost count of the number of words used - a little long! ​

 

[The_Sidewinder]

@micky
Robyn Lawley is a plus size model who has been cover girl of Vauge magazine twice. Also its or luca's dp. We hit where it hurts the most. Works every time.

 

[Guynextdoor2]

current levels are fine. Retail % as same and as GDP grows budget will also growth. Avoiding inflation by maintaining optimum budget is vey important in this growth phase.

 

[COLDHEARTED AVIATOR]

Considering the threats we have 2.5% is fair.

 

[Koovie]

Between 2.0 and 2.5 % is the best compromise IMO.

Anything less or more is not responsible.

 

[Rocky25]

Also India had ignored the private sector for too long... Open gates for American, Russian and Israeli private sector defence manufacturers, DRDO should have the healthiest competition!

 

[desimorty]

This % of GDP is BS. GDP is not the budget of the GOI. We spend 15 % or more of defense and equipment even more considering paramilitary and security and long running strategic projects like reactors. So what if the Indian soldier isn't as well equiped as the US Marine, who is? Did equipment win the war in vietnam? Helmets and bullet proof jackets are only needed in numbers that are adequate as of yet. Why spend more money on it? We don't need these purchases right away. India is strong enough on defensive posture but what India requires is big ticket projects like carriers and aircraft of various roles. Equipment that can build nations or save people. Replacing the INSAS right now would be stupid waste of money as its not about the gun but rather the tactics employed. India does not need to rush low end equipment like rifles and helmets just to look good. The Indian military budget is good enough and needs to be smaller. Training with equipment is more important than wastefull spending.
As i've said before, India needs to concentrate on big ticket items like carriers subs,aircraft ,and tanks since these will help the Indian industry. Building rifles will have limited scope for the economy. But we the arm chair generals don't know better than the Indian military so we should stick to opinons rather than desi bashing.

We are still with WW1 helmets, We need Bulletproof one with Radio. Night Vision Goggles.
We are shot of More than 2LK bullet Proof Jackets. We are still using Soviet era heavy one.

Not really helpfull can save lives but not essential in fighting wars. IDK what Soviet era BPJ your talking about but they work AFAIK the heavier the armor the better the protection. Give and take between mobility and protection. And most soldiers don't even want to use helmets or prefer Patkas. Those Heavy plated BPJ are the only things saving Indian soldier lives aside for their training.

Our Rifle Jams after continuous 10 round fire. Nozzle becomes very hot.

Blame OFB. And why complain? The M-16 wasn't that great and the AK-47 had its own issues. The Chinese QBZ-97 has its own issues as well. But to say the rifle is obsolete is absurd considering the enemy is using homemade AK-47s. Most of the deaths of CRPF and in Kashmir are do to IEDs and ambushes. Rifle can't protect you from that but good training can help you survive.

We are using a Backpacks from WWII era. Boots, Clothes, Jackets, Ration, Tents all need to be modernized.

ah huh, so they are less modern? are boots today gravity floating devices because if not equipment from WWII like this is still as usefull today as it was in WWII. There have no radical innovation in this field. Also it doesn't matter what a soldier looks like on the battlefield, they all look dirty but its the training that makes the difference.

Indigenous has become a Joke and DRDO really need a shake up.

DRDO develops the technology for the services they do not manufacture. Entities like DRDO and DARPA are basically money blackholes, barelly anything comes back out. Its in their nature but they provide essential progress like today nations are selling India their advanced weapons because they know India can make their own given time.

Chairman should be retired from Armed force not some Scientist or IAS.

Thats what got us into the mess. The services want sh!te out of starwars instead of having realistic requirements. The rest is political. Soldier won't be a good science test and politician isn't a good soldier. Real blame hear is on the politicians.

Artillery Support, Tanks (Arjun has become a Joke),, MBRL,

Issue with the bofors is not DRDOs fault, its the politicians. Did they forget to setup a line in India or were they trying to get more kick backs?
Also Arjun has changed the game on the border. The Pakistanis now have to dig deeper canals on the account of a heavy MBT like Arjun and they don't know where Arjun can be. Imagine how much money they spend to counter it.

Choppers (Light, Heavy, Armed) Need in large quantity.

Yea, no one set up a line. Politicians, and because of DRDO's efforts its not easier to bring in industry from India even for licence productions.

We are Still living in 70s as most of the Aircraft from that era.

So is the rest of the world. Those mig-21 clones in China and Pakistan will be around for another 2 decades. Last one was build in 2005 AFAIK.

All MiG under 29K should be retired and we need Rafale and lots of them.

They are working on retiring the Bisons.

Air defence need a tremendous improvement. New SAM required to protect Air Base and Critical Assets.

Hence the Akash program.

Air defence need a tremendous improvement. New SAM required to protect Air Base and Critical Assets.

Something so critical can not be rushed with out big spending.

Is the only force that is getting modernized.

Because they have been neglected for far 2 long.

Import Korean Version Aegis ship defence system.

Why build Kolkatta then?

Under water unmanned Vehicles, Unmanned UAV patrolling round the clock

Not for patrolling. UAV in the air are already their.

You can buy the equipment all you want, but it takes years to learn how to effectively use it.
If you can't tell that the services are in a transition from 80's then you won't be able to predict their future purchases.

 

[Yeti]

No more than $40bn per year for the next 3-4 years as the real threat comes from Pakistani based militants and not from China. We need to invest more in counter terrorism and cyber security rather than manpower.

 

[SR-91]

$50 Billion sounds like a decent number. That would be the 2%.
Would like to see intelligence agencies get .5%
N R&D get extra .5%.

We NEED to spend much more on R&D, than we are right now. If we wanna catch up fast, we should be spending at least 1%.

 

[Major Shaitan Singh]

This % of GDP is BS. GDP is not the budget of the GOI. We spend 15 % or more of defense and equipment even more considering paramilitary and security and long running strategic projects like reactors. So what if the Indian soldier isn't as well equiped as the US Marine, who is? Did equipment win the war in vietnam? Helmets and bullet proof jackets are only needed in numbers that are adequate as of yet. Why spend more money on it? We don't need these purchases right away. India is strong enough on defensive posture but what India requires is big ticket projects like carriers and aircraft of various roles. Equipment that can build nations or save people. Replacing the INSAS right now would be stupid waste of money as its not about the gun but rather the tactics employed. India does not need to rush low end equipment like rifles and helmets just to look good. The Indian military budget is good enough and needs to be smaller. Training with equipment is more important than wastefull spending.

If you can't tell that the services are in a transition from 80's then you won't be able to predict their future purchases.

Thank you for detailed counter answer.

My Question to you is that why we need an Aircraft Carrier, are fighting war in some far away land. Do you understand the meaning of CBG and power projection. You cannot win war in Sea's and in Air, you need to have foot on the ground.

Did you speak to any Jawans to go for counter terror mission in JK or in Assam. when they do house to house search or Area blockade what are the basic thing they require.

I have thousand of link and evolution of Armed force around the globe to counter answer. Building a carrier is more important that saving life of Soldier ?.

 

[Krate M]

@Abingdonboy nice thread. Excellent post by @Chanakya's_Chant as usual.

I agree with @jatt on the %gdp part.

More important than how much we spend is where we spend and how we spend it. As @PARIKRAMA pointed out we should spend on domestic systems as much as possible.

The current government has taken some good steps in the right direction, but a lot needs be done.

Infantry needs to be reduced and streamlined so as to allow greater capex. The slashing of the MSC was a step in this direction. Artillery needs to be bulked up fast and indigenously as much as possible with the private sector. This is absolutely possible and we will see soon how much of this succeeds. PS I don't like the M777 decision.

So on and so forth.

The point is to build capabilities and cover gaps like the MCMV gap, ASW corvette gap etc

And if possible build strategic capabilities like indigenous engine and AWACS, AESA radar etc.