Indian defense officials have laid out a request for a huge increase in spending on arms to New Delhi, most of which will be used to purchase state-of-the-art weaponry from suppliers around the world. In a couple of weeks, the national budget will be presented by the ruling United Progressive Alliance, headed by Prime Minister Manmohan Singh, and while there is intense lobbying from representatives of various sectors to incorporate their demands, attention has focused on the over 40% hike in defense outlay that has been demanded by the India's defense forces, which comes in the wake of an unprecedented 22% increase last year.
Last year, the budget set apart the biggest-ever allocation to defense - the equivalent of US$15 billion for 2004-05. This represented 2.5% of India's gross domestic product, lower than China (6%) and Pakistan (5.5%), though in absolute terms Pakistan spent $4 billion last year, which was an increase of 20% over 2003-04.
The Indian defense community's wish list is long, which they feel is necessary to modernize the country's armed forces. These include a proposal to purchase F-16 fighter jets, Scorpene submarines and long-range rocket systems. The proposal to buy 126 F-16s - at $25 million each over five years - will itself cost the exchequer $3 billion. When this is added to the payments being made for the expensive equipment already purchased, the defense budget takes on huge proportions.
The increased defense spending includes more than $7 billion to purchase weapons systems and to implement the intermediate-range Agni ballistic missile units, capable of delivering nuclear warheads. India last year signed a $1.5 billion agreement with BAE Systems Plc, Europe's biggest weapons maker, for 66 Hawk Advanced Jet Trainer aircraft as part of its plan to modernize its air force.
Last year, the country also inked a multimillion-dollar deal with Russia to acquire an aircraft carrier, the Admiral Gorshkov. India has also agreed to buy three Phalcon airborne early-warning radar systems from Israel valued at $1 billion. Of the 3,414 tanks in the Indian army's possession, 1,200 are obsolete, while 700 of them are vintage Russian T-55s. India has been introducing T-90s phase-by-phase and it is estimated that almost $8 billion will be set apart for a project to increase the firepower of the infantry.
It is estimated that Israel's defense industry sold arms and munitions to India valued at $2.7 billion in 2003, constituting about 30% of its total orders, and offered more at Aero India, a five-day international aerospace and defense exhibition that ended this Sunday in the Indian city of Bangalore. It has been reported that at Aero India, touted as the largest show of its kind in South Asia, deals worth more than $1.2 billion were been signed between Indian and foreign aerospace firms. The deals ranged from aircraft purchases by Indian budget carriers from Airbus and Boeing to the joint manufacture of missiles and engine parts. India's air force is seeking government approval for 126 so-called "multi-role" combat aircraft to replace aging Russian MiGs, India's Air Chief Marshal Satish Tyagi said in Bangalore. Boeing has offered to sell its F-18 jets, while Maryland-based Lockheed Martin has offered its F-16 fighter as part of the deal.
There is one school of thought in India that insists that there is a requirement for such a huge augmentation and modernization of the Indian armed forces. Finance Minister P Chidambaram, while presenting last year's budget, said that the enormous hike in the defense-budget allocation was born out of the "government's determination to eliminate all delays in modernizing the defense forces. Having regard to the trend of defense capital expenditure in recent years, it has become necessary to make a higher allocation this year; 60% of the increase will be utilized for modernization." Some defense analysts say that the country should allocate such a huge portion as the bulk of the defense budget is revenue expenditure (salaries, wages) given the huge size of the Indian army, navy and air force.
Predictably, Pakistan is miffed at India's proposals to hike defense spending. Islamabad has repeatedly warned that India's increased defense spending was a "cause for concern". "This would wittingly or unwittingly accelerate the arms race between the two countries, which we could have avoided because both India and Pakistan need massive resources for poverty alleviation, education, health and for the social sector and creating new jobs," Pakistani Foreign Ministry spokesman Masood Khan said in the recent past. Khan also said that Pakistan had increased its own defense spending, though at a smaller rate than India, and would seek to maintain the "competitive edge of our strategic and conventional capabilities".
The other school of thought is that India's defense spending and war preparedness should take into consideration the threat of actual war in the foreseeable future, short, medium and long term, with greater cause for concern being terrorist attacks, as well as internal insurgencies, such as Naxalism, bad governance, caste and feudal wars and communal violence. This, in turn, should lead to India focusing more on getting its intelligence-gathering infrastructure, external and internal intelligence agencies and paramilitary forces right, rather than building on conventional weapons of war. Given the current state of superiority of India's armed forces over Pakistan, the country from which the threat perception is the highest, there is no requirement for such a massive drive. Further, given the fact that both India and Pakistan are nuclear-weapon states, it is unlikely that a full-scale high-intensity war lasting for weeks will ever happen, making the case for having such a huge cache of arms as well as armed forces redundant.
As far as India's other powerful neighbor, China, is concerned, it is believed that the exponential growth of business relations between the two countries is an effective deterrent, but in any case it would be impossible for India ever to match China's military strength. But business is seen as a bridge to peaceful relations. Sino-Indian bilateral trade has set a record, touching $13.6 billion in 2004, up by 79% over the total trade volume of 2003. India enjoyed a comfortable trade surplus of $1.75 billion, according to Chinese customs statistics. If growth remains at current levels, India-China trade could cross $17 billion by the end of 2004-05. In contrast, India's trade with the United States - its largest trading partner - has grown by just over 23% in April-August 2004. Indeed, there is an increasing comfort level, with India discounting Chinese influence in Nepal after the royal coup there on February 1 and the dismissal of the democratically elected government.
Economists such as Nobel Prize winner Amartya Sen have repeatedly stressed that the rising military expenditure imposes substantial opportunity costs on government priorities such as health and education. According to defense analyst K Subhramanyam, "Modernizing the armed forces does not necessarily mean just adding inventories of the latest hardware ... Unplanned acquisition of hardware without appropriate defense planning based on sound assessment of threat may lead to large-scale avoidable expenditure."
A comment in The Times of India reads: "New Delhi needs to realize that engaging in a pointless arms race with Pakistan serves little purpose. So long as Pakistan remains under authoritarian rule, its defense budget will remain disproportionately high. But that does not mean India needs to match every Ghauri [type of ballistic missile] with an Agni. India enjoys a considerable edge over Pakistan by dint of the sheer size of its armed forces ... As for China, New Delhi is much better off trying to match Beijing's economic growth than its military might. However, the best argument for pulling out of an arms race is that social development and economic growth are the best defense for any nation."
While few would claim that India's armed forces should not be modernized, it is important to pace the process in a way that there is a definite but sure increment without a disproportionate chunk of government funds being siphoned away from equally important needs - the social sector, which affects the welfare of people the most.