India should Aim to Sharpen the Teeth-to-Tail Ratio of its Forces

Context: Today’s circumstances call for defence-budgeting reforms to maximize Indian strike capacity within financial constraints.

Factors necessitating higher defence budget allocation:

• Ensuring national security and sovereignty: Ongoing military standoff with China in eastern Ladakh and expediting key border-infrastructure projects and modernization to tackle the two-front threat. (Chinese belligerence and Pakistan).
• Will support Atmanirbhar Bharat Abhiyan: under which the government has announced measures to promote the indigenous manufacture of defence equipment. Following would require resources -
  • The implementation of the ‘negative arms import list’, under which 101 defence items are to be sourced from the domestic industry;
  • The new Defence Acquisition Procedure of 2020, which accords priority to local industry over foreign companies in arms procurement.

Issues with defence budgeting in India:

• Shortages on procurement front: In the past three years, about 25-33%.
• Inadequate funds: The reduction of fiscal space caused by the economic slowdown will limit funding.
• Imbalanced revenue-capital mix: Nearly 65% of the Ministry of Defence’s budget goes towards salaries, pensions and other such costs, resulting in limited spending on buying new equipment.

Measures taken: Government has tasked the 15^th Finance Commission to - 

• Propose specific measures to ensure adequate, secure and non-lapsable funds for the purpose;
  • A non-lapsable fund for defence would offer a safety cushion for undertaking capital expenditure on procurement without the fear of unused funds being surrendered at the end of each fiscal year.
• Examine the feasibility of setting up a separate mechanism to fund the country’s security.

Conclusion: The government will have the delicate and difficult task of stimulating the economy while also providing adequate resources for defence in improving its teeth-to-tail ratio.