Defence allocations have not
kept pace with rising salaries and pensions
By Ajai Shukla
Business Standard, 5th Feb 18
The defence Budget, which the Union
Government presented on Thursday, underlines serious issues around the
structure of the army, navy and air force and the growing imbalance between
equipment and manpower costs.
Overall, the army emerges as a manpower
intensive force, with a burgeoning salary and pension bill that accounts for
three-quarters of its allocation, leaving only scraps for modernising a vast inventory
of equipment that is racing towards obsolescence.
But the navy and air force, albeit to a
lesser extent, have also begun feeling the pinch of increased personnel costs,
which is constraining their ability to resource new weaponry. While the army
makes the case that numbers are essential for manning a sprawling mountain
border with China and Pakistan, the navy and air force admit that an expensive
technological edge is essential for their functioning.
Given the importance of equipment
modernisation, the overall defence budget should rise at least at the same pace
as salaries and pensions, so that equipment modernisation is not hit. That has
not happened, with rising personnel constituting a growing proportion of the
army, navy and air force budgets.
A detailed, year-on-year analysis by
Business Standard of defence spending since 2014-15 reveals that the navy’s personnel
costs, inclusive of pensions, has risen from 21 per cent that year to 30 per
cent in the coming year’s budget.
That has proportionally impacted the navy’s
capital budget, which has fallen from 58 per cent of its allocations in 2014-15
to just 46 per cent this year and the next.
In real terms, that has reduced the navy’s
capital budget from Rs 22,269 crore (Rs 222.69 billion) in 2014-15 to just Rs 19,348 crore (Rs 193.48 billion) in the current
year. The earlier level will not be regained even next year, for which the navy
has been allocated Rs 20,848 crore (Rs 208.48 billion) in its capital budget.
Given that most categories of military
equipment have an annual inflation rate of 5-10 per cent, this translates into
a substantial decline in buying power each year.
This decline will directly impact the
progress of procurements the navy regards as essential for safeguarding India’s
7,500-kilometre coastline, its island archipelagos and the stretch of ocean
from the Strait of Hormuz in West Asia to the Malacca Strait at the entrance of
South East Asia.
These include the planned purchase of
frigates from Russia, minesweepers from South Korea, a line of six submarines
to be built in India, a second indigenous aircraft carrier, naval fighters to
operate off that carrier, and multirole helicopters to boost warships’
anti-submarine capability.
The air force faces a similar situation,
with personnel costs having grown from 24 per cent of its budget in 2014-15 to
over 35 per cent in the coming year. During this period, the air force’s capital
allocations have proportionally dipped from 58 per cent to 49 per cent this
year.
In absolute terms, the air force’s capital
budget has remained almost static from Rs 32,796 crores (Rs 327.96 billion) in 2014-15 to Rs 35,756
crore (Rs 357.56 billion) in the coming year. Already burdened by a large number of committed
liabilities like the Rs 5000 to 7,000 crore (Rs 50-70 billion) annual instalments for the Rafale
fighter, the air force has little left for planned purchases like the
single-engine fighter and a range of force multipliers like aerial refuellers
that are in the pipeline.
The increase in personnel costs across the
1.6 million-person military has stemmed from the implementation of the One
Rank, One Pension formula, and across-the-board salary increases recommended by
the 7th Central Pay Commission.
The Parliament’s Standing Committee on
Defence has recommended the revamping of personnel policy, as have successive
committees including the Naresh Chandra Task Force and the Shekatkar Committee.
However, no substantive changes have been announced or implemented.
Chart: Personnel costs rise, modernisation suffers
(Rupees billions)
|
Salary
(X)
|
Pension
(Y)
|
Manpower
costs
(X+Y
= Z)
|
Non-salary
revenue
(A)
|
Capital
budget (B)
|
Total
Non-manpower (A+B = C)
|
Total
service budget Z + C
|
Ratio
on personnel
|
Ratio
on equipment
|
|
|
Army*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014-15 (Actual)
|
616.39
|
543.48
|
1,159.87
|
322.16
|
132.46
|
454.62
|
1,614.49
|
72%
|
8%
|
|
2015-16 (Actual)
|
653.52
|
541.16
|
1,194.68
|
348.23
|
206.02
|
554.25
|
1,748.93
|
68%
|
12%
|
|
2016-17 (Actual)
|
772.36
|
776.58
|
1,548.94
|
375.87
|
282.31
|
658.18
|
2,207.12
|
70%
|
13%
|
|
2017-18 (RE)
|
848.85
|
837.22
|
1,686.07
|
375.55
|
252.06
|
627.61
|
2,313.68
|
73%
|
11%
|
|
2018-19 (BE)
|
892.83
|
959.49
|
1,852.32
|
387.94
|
266.88
|
654.82
|
2,507.14
|
74%
|
10.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Navy**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014-15 (Actual)
|
57.79
|
22.96
|
80.75
|
78.91
|
222.69
|
301.60
|
382.35
|
21%
|
58%
|
|
2015-16 (Actual)
|
61.90
|
23.11
|
85.01
|
88.02
|
198.75
|
286.77
|
371.78
|
23%
|
53.5%
|
|
2016-17 (Actual)
|
71.61
|
35.75
|
107.36
|
99.76
|
199.97
|
299.73
|
40.709
|
26.5%
|
49%
|
|
2017-18 (RE)
|
83.89
|
41.71
|
125.60
|
104.90
|
193.48
|
298.38
|
423.98
|
29.5%
|
46%
|
|
2018-19 (BE)
|
86.34
|
48.36
|
134.70
|
109.37
|
208.48
|
317.85
|
452.55
|
30%
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
Air Force
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014-15 (Actual)
|
105.33
|
37.66
|
142.99
|
92.09
|
327.96
|
420.05
|
563.04
|
24%
|
58%
|
|
2015-16 (Actual)
|
112.87
|
37.74
|
150.61
|
97.34
|
311.98
|
409.32
|
559.93
|
27%
|
56%
|
|
2016-17 (Actual)
|
128.61
|
65.81
|
194.42
|
99.95
|
303.86
|
403.81
|
598.23
|
32.5%
|
50%
|
|
2017-18 (RE)
|
166.30
|
70.70
|
237.00
|
105.80
|
335.56
|
441.36
|
678.36
|
35%
|
49%
|
|
2018-19 (BE)
|
177.53
|
80.32
|
257.85
|
110.68
|
357.56
|
468.24
|
726.09
|
35.5%
|
49%
|
|
|
|
|
|
|
|
|
|
|
|
* Including Rashtriya Rifles and National
Cadet Corps
** Including Joint Staff
An excellent analysis.
ReplyDeleteChina I hear has moved 53 fighters to Tibet according to Times Now.
But we all can take consolation from the fact that we at Doklam sent the Chinese scuttling back from their occupation with their tails between their legs.
The bravery and the superior training of our Jawans is a great force multiplier and should be taken into account while discussing the defence budget. Underthe leadership of PM r soldiers have proved themselves to be the best in the world in places of severe conflict like Kashmir and the Far East, they have become battle hardened fighting the Stone pelters.
Officers are known for their initiative like binding one of them terroists to the front of a Jeep. Our NDA and IMA are the best in the world.
Doklam has taught the Chines that under Modi India cannot be messed with.
One Indian Jawan is = to four Chinese soldiers. The chinks do not have a clue at what’s coming.
As General Rawat doctrine is. India is prepared to fight on three fronts. All at the same time and give a bloody thrashing to
China
Pakistan
Terrorism
We must not forget our three million strong RSS stalwarts are fully military trained and Yogi Ji has his own Sena.
Please do not give such a pessimistic and cowardice view in your article you Congress bas***tard - people like you should be put against the wall and shot.
When we consolidate our power, RSS is going to make a big concentration camp like the Gulag. It will be in Ladak where it is very cold, presstitutes like you will be first to be put in them. You will be left to die in the first winter with very little food and no warm clothing.
Many people are going to go into these camps anti nationals, un patriotic people and Muslims
Ha ha ha...you are funny
DeleteThe writing has been on the wall, if you see western armed forces.
ReplyDeleteIAF has increased its manpower by going in for a big number of SU-30.
They should have bought limited 2 seater Su-30 rest single seater Su-27.
The beauty is everyone claims it is cost effective platform.
Have jets that can carry stand off weapons, not fly 3000 miles into enemy territory.
Make these weapons by thousands very year so they become cheap.
Same with navy, each ship should have lower number of crew.
More automation at all levels.
The situation will get even worse when army introduces 100+ attack helicopters.
The way to go would be to have JCOs fly attack and light helicopters.
the armed forces are paid well especially after 7th pay commission and still want more. add to that OROP and on top of that we are adding tens of thousands of more men and women to fill in the gaps of people who are leaving or retiring. this is not tenable and will lead to exponential growth in pension and revenue budget leaving little for capital expenses. no other department gets pension entitlement and hence no wonder defence budget is highest line item in the general budget. even cutting down on men will not yield results quickly as they will move from serving to pensioners. our requirement is 250 bil dollars and for that we need to add 50 bil in our capex for 5 years and that cannot happen and even if does that costs will increase every year.
ReplyDeletemake the shekatkar committee public and implement it in letter and spirit. otherwise in the next few years we will have the 3rd largest budget and yet the force with maximum gaps and obsolescence.
THE BUDGET CLEARLY SIGNIFIES THAT THE CRYING NEEDS OF NATIONS EDUCATION HEALTH SANITATION HOUSING INFRASTRUCTURE REQUIRE VAST AMOUNT OF INVESTMENTS TO COVER FOR 60 YEARS OF INSUFFUCIENT FUNDING . THE THREE SERVICES ESPECIALLY THE FLAG RANKS MUST REALISE THAT THE NATION NO LONGER CAN AFFORD A STANDING ARMY OF 1.3 MILLION AND THE THREE SERVICES MUST THINK IN TERMS OF 3, 5 7 10 12,15,18 20 YEARS OF SERVICE FOR ALL RANKS AND OFFICERS . THE SHORT SERVICE TO PERMANENT MUST BE 60% VS 40 %. THE ARMED FORCES MUST VEHMENTLY ASK FOR DOWNSIZING THE 5.8 LAKH CIVILIAN COMPONENT WHO HAVE LITTLE JOB AND LIFETIME PAY AND PENSIONS , AFHQ, MOD CGDA DEFENCE ESTATES , DEFENCE PSUS , ORDNANCE FACTORIES AND SCORES OF CIVILIAN JOBS CAN BE EASILY ABOLISHED OUTSOURCED AS THESE ARE BASED ON SCALES AND WORK PRACTICES WHEN COMPUTERS WERE NON EXISTANT .THE 2LAKH CRORE SALARY AND PENSION BILL 60 % IS OF CIVILIANS NON COMBATANTS WHO ARE NEITHER REQUIRED NOR CONTRIBUTE IN ANY WAY IN THE OUTCOMES . THE AFHQ, MOD IS BASICALLY A NUISANCE MONKEY ON THE BACKS OF UNIFORM RANKS .
ReplyDeletePlease tell MoD civillains that they are useless.
DeleteThe army must realise that fewer soldiers and more equipment is the only solution to the funds crunch.
ReplyDelete