Accountability and transparency are extremely important for a democracy to function for the benefit of the people. Having a huge defense budget and expensive purchases that contribute little to the real security of nation, be it India or Pakistan, also contributes to abuse, fraud and waste.
Looking at India's 2010 budget, more than half of it goes for defense, internal security, paramilitary, intelligence and debt servicing, leaving less than half for everything else, including healthcare, education, nutrition, infrastructure development, etc etc.
So the governments need to do both: seriously evaluate what is being spent where and why? And ensure closer oversight for best results. As Col Nair puts it in his post:
"Defense economics has not been a subject for serious study or debate in Indian academic or military circles. Little or no literature is available with the exception of a few books in the area of defense accounts. Economists and activists have long argued that defense related expenditure needs to be curtailed. Opinion is clearly divided between the developmental lobby and strategic thinkers who wield influence with the political leadership. This paper will attempt to make a realistic assessment of current levels of defense spending by evaluating the efficacy and intensity of military expenditure. Indeed, some arguments have been made before but bear repetition in the current scenario. Parliament passes the defense budget with little or no discussion. The media is largely ignorant or chooses to ignore the issue of defense spending. The view across the political spectrum and indeed the strategic community is that any exercise to limit defense spending amounts to compromising national security and is therefore not a viable consideration. Whilst it is true that development cannot take place in an insecure environment, defense expenditure (DE) in a developing country directly impacts the outlay on social spending. The "guns versus butter" argument is valid especially when the guns (and missiles) are not buying the security the country needs against asymmetrical threats from within and without."
Haq's Musings: India's Arms Buildup: Guns Versus Bread