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In the backdrop of the gruesome 14 February 2019 suicide attack on the Central Reserve Police Force convoy in Pulwama, Jammu & Kashmir, the subsequent air strikes and all that followed since then once again raises the question about India’s ability to deal with security crises. And that question comes loaded with the fundamental query about the nature of India’s preparations and planning. All of which then raises the essential issue of how India has thought through its defence apparatus, what its long term preparations are, and how it hopes to get there. These can only be answered by first understanding the process of defence finance.

The defence budgeting process in India continues to be based on the age old practice of plan and non-plan expenditures. As well as the recurring revenue section of the budget that is ever growing but which barely helps the process of modernising the armed forces. It is with this dilemma that the country’s defence budgeting process has been mired over the last few years. The process is, in itself, the problem rather than a solution. For, it is based on an age old practice that has long outlived its utility and functional efficiency.

Defence budgets are actually a mix of two major aspects. Firstly, the recurring revenue budget which covers aspects that cannot really be tinkered with, or affected, other than by new policy initiatives. A pay commission grant, for example, makes a major change for the revenue budget, but aspects of it have always existed in this section in the past. The other is the capital budget, on which greater scrutiny happens than in any other aspect of even the general budget. As this is the section that explains and elucidates the government’s vision of military modernisation, as this takes care of equipment acquisition.

Which is where major changes are required; especially in the defence budgeting part of the general budget. Defence purchases, of the big ticket variety, have a long period of design, development, purchase and then indication. Just as technologies evolve rapidly, so do national security threats. Keeping pace is not always possible, and many a times, it also is not advisable from a financial perspective. This keeping apace pushed the former Soviet Union into bankruptcy and oblivion. But there is still a requirement to be in touch with the latest, so obviously something needs to be done for the budget to be dynamic.

Keeping all these factors in perspective, there is a dire need to change the defence budgeting process, from an annual exercise to one that encompasses a long term national security vision which factors in technological changes as well. The Ministry of Defence, in consultation with the armed forces headquarters, must constitute a cell that creates a long vision document, and for the realisation of which funds are allocated as a commitment, rather than as an annual announcement. Committed long term funds release pressures on developers, as well service headquarters which have to complete acquisitions within the financial calendar year or the monies lapse. This can only be prevented with a long term vision, and financial commitments.


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