#201 Blocking out the Sun

<p><strong>India Policy Watch #1: What Do Successive Defence Budgets Reveal?</strong></p><p><em>Insights on burning policy issues in India</em></p><p><em>— Pranay Kotasthane</em></p><p><em>(An edited version of this article was </em><em>published</em><em> in Hindustan Times on 13th Feb)</em></p><p>Another defence budget zoomed past us on Feb 1. Since then, analyses have focused on how the defence spending for the coming year departs from the last year. Some have waved a red flag as defence spending has fallen below 2 per cent of GDP for the first time in many years. On the other hand, the defence ministry’s post-budget press release emphasised a 44 per cent increase in operational spending, which is expected to “close critical gaps in the combat capabilities and equip the Forces in terms of ammunition, sustenance of weapons & assets, military reserves etc.” The ministry also highlighted that the capital outlay for modernisation and infrastructure development has risen by a seemingly handsome 57 per cent over the last five years. How, then, do we make sense of these conflicting narratives?</p><p>Comparing allocations with those in the previous year gives us a confusing picture. Every interest group can pull up a number from the budget to suit their pre-formed narrative. Taking a step back from these narratives, this article will show that this was another run-of-the-mill defence budget, just like the previous one was. Nothing in it indicates any significant change in the defence posture. Unlike Japan, which has announced a doubling of its military spending in the next five years, India’s approach is about gradually improving the operational efficiency of the armed forces.</p><p><strong>Looking under the hood</strong></p><p>This article looks at the defence expenditure over the last six budgets to make sense of the numbers. To put numbers into context, let’s use an earlier year (FY16). FY16 is a useful reference point as it predates two major developments: China’s visibly aggressive posture on the border and the bu