Saturday, 26 July 2014

Govt rejects compulsory military training; says unemployed youth could join militants


Meanwhile NCC training rises, enrolment to cross 18.5 lakh students

By Ajai Shukla
Business Standard, 26th July 14

The government walks a tightrope between inculcating military discipline and physical fitness in the country’s youth, whilst also safeguarding against a militarised society from where extremist groups can draw on disgruntled youngsters with military training.

While the defence ministry expands the National Cadet Corps (NCC) from 1,500,000 students countrywide to 1,850,000, Defence Minister Arun Jaitley told parliament on Friday that the government does not favour compulsory military training.

He was responding to Karnataka Member of Parliament (MP), CS Putta Raju. Several MPS have made similar proposals over the last five years. Three private member bills have sought compulsory military training. This includes one from Adhir Ranjan Chowdhury, minister of state for railways in the United Progressive Alliance (UPA) government, and now Congress Party president in West Bengal.

Mr Jaitley rejected compulsory military training for four reasons. First, it would violate India’s “democratic ethos”, where people are free to choose their professions. He said, “The Constitution does not provide for compulsory military training”.

Second, this might militarise India’s fragile society. In a startling admission, Mr Jaitley declared: “With our socio-political and economic conditions, (compulsory military training) is highly undesirable, lest some of the unemployed youth trained in military skills join the ranks of the undesirable elements.”

The government’s apprehension about its citizens contrasts with the United States, where the Second Amendment to the Constitution protects the rights of individuals to keep and carry arms. This is justified through citizens’ right to self-defence, the right to resist oppression (including by the state), and the civic duty to come to the defence of the state. Passed in 1791, this one-sentence amendment states, “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”

Jaitley’s third objection to compulsory military training is that, the armed forces have “no problem in getting adequate numbers of volunteer recruits.”  Therefore, there was no need to provide military training across the board.

Last, the government’s reply noted that training youth across the country would involve enormous expense and infrastructure creation. “The likely benefits of imparting military training to all the youth will not be commensurate with the expenditure involved in such an effort,” he said.

While compulsory military training carries ominous overtones, the government has steadily expanded the NCC, which includes military and weapons training. Last September, at an apex NCC council meeting, the UPA minister of state for defence, Jitendra Singh, suggested “including aspects of the NCC syllabus into the curriculum of all schools and colleges.”

The demand for NCC training is strong. Last September the defence ministry stated that 4613 schools and 2764 colleges are on the waiting list for NCC training, with some having applied 25 years ago. To meet that demand, the NCC is upgrading 153 “minor units” to battalion strength. This would allow training to be extended to some 3200 institutions on the waiting list, and increasing the NCC’s strength to 18.5 lakhs.

Also being explored is a “self-financing model”, in which out of turn sanction would be provided to private schools willing to pay the full cost of NCC training.

Thursday, 24 July 2014

Defence budget analysis: High costs, running expenses, leave little for defence equipment



By Ajai Shukla
Business Standard, 24th July 14

The Rs 2,29,000 crore that Finance Minister Arun Jaitley allocated for defence in the Bharatiya Janata Party (BJP)-led government’s first budget on July 10, a mere 2 per cent rise over the last government’s interim allocation in February, would have disappointed those who were reading too literally the BJP’s manifesto and nationalist rhetoric in the run up to the general election in May.

This would also have disappointed the military, which was allocated just 80 per cent of its projected requirement of Rs 2,85,202 crore.

The modest allocation would suggest that the government anticipates a benign security environment in the region, notwithstanding the United States and North Atlantic Treaty Organisation troop drawdown in Afghanistan by end-2014.

Instead of placing defence allocations on a trajectory towards 2.5-3 per cent of Gross Domestic Product (GDP), which national security hard liners have argued for, Mr Jaitley allocated just 1.78 per cent of GDP, only marginally higher than the interim budget’s 52-year low of 1.74 per cent. This will amount to 12.75 per cent of the central government spending this year.

In fact, the defence spending actually amounts to 2.55 per cent of GDP if one takes into account several expenditures that are not included in the defence budget, but which most countries count as defence spending.

These hidden expenditures includes (see Chart 1) Rs 3,639 crore allocated to the defence ministry itself (Demand No 20); and Rs 51,000 crore earmarked for defence pensions (Demand No 21). It includes Rs 8,737 allocated to the department of atomic energy (Demand No 4), which develops, builds and stores India’s nuclear weapons. It includes Rs 37,322 crore spent on border forces and counter-insurgency forces like the Border Security Force, Indo-Tibet Border Police, Assam Rifles and the Assam Rifles (Demand No 55). Finally, it includes Rs 6,673 crore allocated to the Border Defence Management Board that builds strategic roads for the military (Demand No 83).

Counting these allocations, defence expenditure is actually Rs 3,36,371 crore, a full Rs 1,07,371 crore higher than the stated allocation. This amounts to 2.55 per cent of GDP.

Of the stated budget (see Chart 2), the army gets roughly half (49.5 per cent); the air force almost a quarter (23 per cent); while the remaining quarter is shared between the navy (16 per cent), the Defence R&D Organisation (DRDO), the Ordnance Factory Board (OFB) and others.

The big gainer this year is DRDO, which has seen funding rise from about 5 per cent to 6.5 per cent of the defence budget. Its capital budget has been raised by almost 60 per cent, to Rs 9,298 crore. This signals strong ministry support to indigenisation projects under way, such as the Tejas Mark II fighter; the Arjun Mark II tank; the Sagarika submarine launched ballistic missile (SLBM) and a major new project to develop a 155 millimetre/52 calibre towed howitzer.

Worryingly the modernisation budget (Rs 94,588 crore) remains significantly lower than the revenue budget (Rs 1,34,412 crore), with a capital-to-revenue ratio of just 41:59. The army spends just 18 per cent of its budget on equipment. In contrast, the navy and air force spend a healthy 61-62 per cent of their budget on capital expenditure, i.e. new warships, aircraft, weapons and ammunition.

The army’s massive manpower accounts for its high revenue spend, and this is set to grow. Defying the global trend of army downsizing, two recently raised mountain divisions and a planned mountain strike corps will raise the army’s numbers from 12 lakhs to almost 13 lakhs.

The Parliamentary Standing Committee on Defence figures reveal that the army’s equipment modernization is steadily falling. In 2008-09, the army spent 27 paisa of each rupee on capital expenditure. This fell to 24 paisa in 2009-10; 23 paisa in 2010-11; 20 paisa in 2012-13 and just 18 paisa in the last two years.

This army’s payroll of Rs 65,808 crore this year (see Chart 3) will consume almost 60 per cent of its entire budget, leaving just one-third that amount for new equipment. This is so even after doubling the army’s capital allocation from Rs 10,749 crore last year to Rs 20,665 crore this year (see Chart 4). As the cost-of-living index rises, so too will military salaries; the seventh pay commission will raise them even higher.

Aircraft acquisitions are also lagging, due to the air force’s dependence on expensive foreign purchases. Its capital budget is down from Rs 36,017 crore in 2013-14 to Rs 31,818 crore this year. With most of this pre-allocated for equipment bought in preceding years, little is left for buying the Rafale fighter, which the defence ministry is negotiating with French vendor, Dassault. With the Rafale’s contract value estimated at Rs 80-1,00,000 crore, the signing advance would be Rs 10-15,000 crore. Additional allocations would be needed for the contract to be signed this year.

The navy’s capital allocation has been raised from Rs 19,600 crore in 2013-14 to Rs 22,312 crore this year. A major capital procurement this year will be the Rs 45,000 crore contract for seven Project 17A stealth frigates that two public sector shipyards will build --- Mazagon Dock Ltd, Mumbai; and Garden Reach Shipbuilders and Engineers, Kolkata.

In his budget speech, Mr Jaitley also announced that the FDI cap in defence would be raised from 26 per cent to 49 per cent. While adding a reformist patina to an otherwise unremarkable defence budget, this was really a policy announcement, unconnected with defence allocations.

================================

Chart 1: Defence spending outside the budget

Ministry/Head
2012-13 (Actual)
2013-14 (RE)
2014-15 (BE)
Ministry of Defence (Demand No 20)
3383
3742
3639




Defence pensions (Demand No 21)
43368
44500
51000




Dept of Atomic Energy (Demand No 4)
6317
6969
8737
Border security and counter insurgency
(Demand No 55)
28513
33446
37322
Border roads agencies (Demand No 83)
3291
6572
6673
Spend outside defence budget
84872
95229
107371
Spend within defence budget
181776
203672
229000
Actual defence spend
266648
298901
336371
Gross Domestic Product
10113281
11320463
12876653*
Def budget percentage of GDP
1.79%
1.79%
1.78%
Def spending percentage of GDP
2.60%
2.60%
2.55%



Chart 2: Budget share breakdown


Revenue
Capital
Total
Share of the budget
Revenue to Capital ratio






Army
92669
20665
113334
49.5%
82:18
Navy
13976
22312
36288
16 %
38:62
Air force
20507
31818
52325
23 %
39:61
Ordnance factories
1275
1207
2482
1 %
51:49
Defence R&D Org
5985
9298
15283
6.5%
39:61
Others
0
9288
9288
4 %
---






Total
134412
94583
229000
100%
59:41



Chart 3: Revenue budget breakdown

Sub-head
                        Allocation

2012-13
2013-14 (RE)
2014-15 (BE)






Salaries (Army)
53984
59551
65808

Salaries (Navy)
4696
5056
5506

Salaries (IAF)
8378
9155
9972

Total salaries
67058
73762
81286






Transportation
3233
3401
3544

Stores
23777
27081
28026

Works
8256
9235
9635

Tri-service bodies
1295
1481
1589

DRDO
5150
5673
5985

Ordnance Factories
(-)617
397
1275

Miscellaneous
3125
3770
3072






Total revenue allocation
111277
124800
134412




Chart 4: Capital budget breakdown


2012-13
2013-14 (RE)
2014-15 (Final)
Land & works, Married Accommodation
5755
6054
6952
R&D (DRDO)
4644
5258
9298
Ordnance factories
349
466
1207
Army
10872
10749
20665
Navy
16889
19600
22312
IAF
31053
36017
31818
Joint Staff
924
619
1029
Defence Rail Network
-
-
1000
Miscellaneous
13
109
307




Total capital allocation
70499
78872
94588