India’s new defense budget falls short

[Dante80]

India’s new defense budget falls way short for modernization plans
Vivek Raghuvanshi - 6 Feb 2019 - Defensenews

A Rafale multi-role combat aircraft from Dassault Aviation of France takes off at Yelahanka Airforce Station in Bangalore on February 18, 2015,on the inaugural day of Aero India 2015. According to Indian defense officials, the majority of funds in the latest budget will go towards past committed liabilities for Rafale fighters, S-400 missile systems, warships and helicopters. (Manjunath Kiran/AFP/Getty Images)

NEW DELHI – India’s defense budget for 2019 included a marginal 6.87 percent bump to $49.68 billion, which is unlikely to meet modernization demands or ‘Make in India’ manufacturing increases.

Out of the total allocation, $16.91 billion has been set aside to buy new weapons and other military hardware, compared to $14.68 billion in the previous financial year. But not accounted for are the liabilities, say some defense analysts, which could chip away at available funds.

“As of now, one doesn’t know about the extent of committed liabilities to be able to say how much money will be available for new purchases,” said Amit Cowshish, former financial advisor for the Ministry of Defence acquisition. "But it can be said with reasonable certainty that the allocation must be much less than the requirement projected by the ministry. That being the case, the ministry will have to make do with whatever money they have got, just the way they have been managing in the past.”

India’s defence budget is more than five times that of Pakistan, pegged at $9.6 billion — barely enough to maintain its basic operational capability.

Presenting the interim budget for 2019-20 in parliament, Union Minister for Finance and Corporate Affairs Piyush Goyal said additional funds, if necessary, would be provided to secure India’s borders and maintain its defense preparedness.

Under capital outlay, the Army was granted $4.60 billion and the Navy granted $3.61 billion — both nearly flat compared to the year before. The Indian Air Force was allocated $6.14 billion, combared to $5.58 billion in the previous year.

One MoD official said the majority of funds will go towards past committed liabilities for Rafale fighters, S-400 missile systems, warships and helicopters. Still, the fact that the budget saw an increase is noteworthy to some.

“The allocation for defense, which for the first time has crossed the $49 billion threshold is encouraging," said Baba Kalyani, chairman of leading private sector defense enterprise Bharat Forge Ltd. In terms of manufacturing, "we hope that ‘Make in India’ will result in a greater role for the private industry in this critical sector of the country’s economy.”

Cowshish is less encouraged, seeing very few noteworthy programs on the horizon.

“It doesn’t seem likely that many big contracts for fighters, helicopters, submarines, etc. will get concluded in the coming year," he said. "This is not because of paucity of funds but on account of the fact that none of these procurement proposals are likely to reach anywhere near the contract conclusion stage any time soon. “

Source:. https://www.defensenews.com/global/...dget-falls-way-short-for-modernization-plans/

 

[Super Falcon]

What left short is going to modi and RSS goons pockets for gaow mata protection job

 

[Skull and Bones]

Defense budget as a fraction of gdp should go down as our gdp keeps on increasing. Ideal fraction should be 1.5-1.8%.

 

[Dante80]

Defense budget as a fraction of gdp should go down as our gdp keeps on increasing. Ideal fraction should be 1.5-1.8%.

On the other hand, keeping it stable as a percentage while the economy is getting bigger has its own merits.

1. You can off-set internal inflationary pressures on the budget, as it pertains to foreign military acquisitions (that are not enacted in domestic currency).

2. It is easier to run a multi-year modernization drive plan with a known and quantifiable upscale in the budget that is tied to GDP, than it is with a flat budget and irregular ad hoc increases.

Each approach has advantages and disadvantages. Having said that, I agree that a future push for a sub 2% budget should be the goal of any country that wants to balance its resources properly while still maintaining a strong security/military aperture to promote national interest.

 

[randomradio]

This is only a pre-election interim budget. There will be another one after the elections.

Defense budget as a fraction of gdp should go down as our gdp keeps on increasing. Ideal fraction should be 1.5-1.8%.

The need of the hour is 2.5%. 3% is highly desirable, but not expected. 1.5-1.8% is too less. We are in dire need of modernisation after all.

Since modernisation did not take place properly for years, and what should have been a gradual process, we are now stuck dealing with everything at once.

 

[Han Patriot]

This is only a pre-election interim budget. There will be another one after the elections.



The need of the hour is 2.5%. 3% is highly desirable, but not expected. 1.5-1.8% is too less. We are in dire need of modernisation after all.

Since modernisation did not take place properly for years, and what should have been a gradual process, we are now stuck dealing with everything at once.

My sincerest opinion, seriously, just use the money on your people, you are using more money to pay pensions and salary than to modernize your military.

 

[Pakistansdefender]

Indians are so proud of ambanis money, claim it as their own.
surely he can chip in some money. He is earning billions from corrupt deals.

 

[randomradio]

My sincerest opinion, seriously, just use the money on your people, you are using more money to pay pensions and salary than to modernize your military.

Salary and pensions are always one of the largest parts of a defence budget. No different in China or the US.

 

[Nilgiri]

On the other hand, keeping it stable as a percentage while the economy is getting bigger has its own merits.

1. You can off-set internal inflationary pressures on the budget, as it pertains to foreign military acquisitions (that are not enacted in domestic currency).

2. It is easier to run a multi-year modernization drive plan with a known and quantifiable upscale in the budget that is tied to GDP, than it is with a flat budget and irregular ad hoc increases.

Each approach has advantages and disadvantages. Having said that, I agree that a future push for a sub 2% budget should be the goal of any country that wants to balance its resources properly while still maintaining a strong security/military aperture to promote national interest.

It is an election year, and the money (for populist programs) this time had to come from some big ticket items....and defense is biggest outlay so its only natural.

Structurally I think 5 year window is better timeframe to judge defense spending, capability realisation, structural reform and future projection etc (that is a political term in India too).

 

[Arulmozhi Varman]

It is an election year, and the money (for populist programs) this time had to come from some big ticket items....and defense is biggest outlay so its only natural.

Structurally I think 5 year window is better timeframe to judge defense spending, capability realisation, structural reform and future projection etc (that is a political term in India too).

But our defence budget for past 5 years has been disappointing as a whole. Other than Rafale and S400 no big orders have been signed. However Infra, public health is garnering most of the money. We can only hope they pay back for defence in the longer run.

This 49$ doesnt account for Strategic projects like Missiles and Nuke submarines. Guess it might be 2B more.

 

[Nilgiri]

But our defence budget for past 5 years has been disappointing as a whole. Other than Rafale and S400 no big orders have been signed. However Infra, public health is garnering most of the money. We can only hope they pay back for defence in the longer run.

This 49$ doesnt account for Strategic projects like Missiles and Nuke submarines. Guess it might be 2B more.

Well it comes down to hemming in fiscal deficit because of the NPA crap UPA-II built up.

Its all fun and games if you keep it at 4 or 5% of GDP....i.e basically around 30 billion extra to play with in budget....and add it all to defense if you wanna. But BJP stuck to the recommendation to get the level as close to 3% of GDP as they can. So defense spending just cannot balloon anymore...without sacrifice on other spending. What is needed is much better rationalisation/realisation of existing spending levels....BJP has been lacking there too...but its not as bad as it once was with UPA.

 

[beijingwalker]

Salary and pensions are always one of the largest parts of a defence budget. No different in China or the US.

That's why China cut half of the size of her army.

 

[randomradio]

That's why China cut half of the size of her army.

China's army was always bloated.