“Guns for Butter”
The latest in a 5-part series on the Standing Committee on Defense report, which says India will not be able to absorb more defense funding
By Vikas Gupta
Defence News of India, 3 Apr 23
35e Report of 17e The Lok Sabha Defense Standing Committee, which was tabled in Parliament on March 21, reveals that successive defense budgets from the financial year 2018-19 (FY19) to the most recent – for FY24 – have steadily increased in real terms, but have declined as part of the national economy (gross domestic product or GDP).
Defense allocations have also steadily declined as a percentage of central government expenditure (CGE) each year.
“The Committee was informed that the total defense budget (including Ministry of Defense (civilian) and defense pensions) is ₹5,93,537 crore for FY24, or 13.18% of total central government expenditure (CGE) and 1.97% of GDP for FY24,” the report said.
2018-19 Defense Allocations
(in crore rupees)
|
|
2018-19 (Actual) |
2019-20 (Actual) |
2020-21 (Actual) |
2021-22 (Actual) |
2022-23 (RE) |
2022-24 (BE) |
|
|
|
|
|
|
|
|
|
Total Defense Spending |
403457 |
4,52,996 |
4 84 736 |
5,00,681 |
5,84,791 |
5 93 538 |
|
|
|
|
|
|
|
|
|
State expenditure (CGE) |
23,15,113 |
26,86,330 |
35,09,836 |
37,93,801 |
41,87,232 |
45,03,097 |
|
|
|
|
|
|
|
|
|
Defense expenditure as a percentage of CGE |
17.43% |
16.86% |
13.81% |
13.20% |
13.97% |
13.18% |
|
|
|
|
|
|
|
|
|
Total GDP |
1,88,99,668 |
2,00,74,856 |
1.98.00.914 |
2,36,64,637 |
2.73.07.751 |
3,01,75,065 |
|
|
(3rd RE) |
(2n/a RE) |
(1st RE) |
(EP) |
(1st AE) |
|
|
|
|
|
|
|
|
|
|
Defense expenditure as a percentage of GDP |
2.13% |
2.18% |
2.4% |
2.12% |
2.14% |
1.97% |
|
|
|
|
|
|
|
|
Note: GDP figures for fiscal year 2018-19 to 2022-23 are consistent with Economic Survey 2022-23
1.6-The components of GDP at current prices and for the 2023-24 financial year come from the Budget at a Glance (2023-24).
CGE figures for 2021-22 (actual), 2022-23 (RE) and 2023-24 (BE) are in line with Budget at a Glance (2023-24)
BE= Budget Estimates, RE=Revised Estimates, PE=Provisional Estimates, AE=Advanced Estimates
The Ministry of Defense (MoD) also told the Standing Committee on Defense that the capital budget for FY24 amounted to approximately 17.12% of total central government capital expenditure.
When the Standing Committee asked the Department of Defense for data on defense expenditures of other relevant countries, the Department stated: “Comparable comparison of defense expenditures with those of other countries is difficult…from the military expenditure database of the Stockholm International Peace Research Institute (SIPRI), data on the defense budget of neighboring countries and some advanced countries, including defense expenditure as a percentage of their GDP and the share of public expenditure, are presented below (see graph of the table). ”
Defense expenditure of other countries
(In millions of current U.S. dollars)
|
Country |
2019 |
2020 |
2021 |
||||||
|
Defense expenditure |
Percentage of GDP |
Percentage of public expenditure |
Defense expenditure |
Percentage of GDP |
Percentage of public expenditure |
Defense expenditure |
Percentage of GDP |
Percentage of public expenditure |
|
|
|
|
|
|
|
|
|
|
|
|
|
China |
(240,333) |
(1.73%) |
(4.91%) |
(257,973) |
(1.80%) |
(4.75) |
(293,351) |
(1.74%) |
(5.03%) |
|
Pakistan |
10,388 |
4.11% |
18.70% |
10,395 |
4.03% |
17.44% |
11,305 |
3.83% |
17.82% |
|
UNITED STATES |
734 344 |
3.43% |
9.60% |
778 397 |
3.72% |
8.20% |
800 672 |
3.48% |
8.32% |
|
Russia |
65 201 |
3.83% |
11.40% |
61,713 |
4.26% |
10.59% |
65,907 |
4.08% |
10.79% |
|
UNITED KINGDOM |
56,851 |
1.98% |
5.17% |
60,675 |
2.24% |
4.56% |
68,366 |
2.22% |
4.66% |
Figures in (brackets) are SIPRI estimates; Source: SIPRI Military Expenditure Database »
Justifying India’s sub-2% level of defense spending, the Defense Secretary told the Standing Committee that, in line with global standards, governments typically spend 3% of GDP on defence, 2% on healthcare health and 3% for agriculture.
“Three percent of GDP will be around ₹10 billion, if we take next year’s GDP at around US$3.2 trillion. The Ministry of Defense might not be able to absorb 3 % of GDP We may not need so many things What is needed for the Ministry of Defense has (already) been allocated.
The Secretary of Defense was asked if India is spending enough to develop border infrastructure comparable to neighboring countries. He replied, “Infrastructure is a very important factor in winning the war. A very long-term plan has been prepared. It is revised each year for border infrastructures. As you can see, under Udaan Scheme, we are building several airfields, airports all along the border and also inside the country. We are expanding our infrastructure like never before.
Asked about the steps envisaged to achieve integration between the three services and the creation of Integrated Theater Commands (ITCs), the MoD responded in writing.
“The reflections on the reorganization of the armed forces in CCI are in progress. ITCs will facilitate better coordination and integrated application of force, which will improve operational effectiveness and optimize the use of resources. The likely benefits will be: Increased operational efficiency; optimal use of resources; synergy in the development of capabilities and (the use of) emerging defense technologies, (such as) next-generation weapons, artificial intelligence, disruptive technologies, etc. “said the Ministry of Defense.
