Prioritising Threat-Based Defence Expenditure

Editor’s Note

Each year, after the Finance Minister presents the budget there is a lot of hue and cry during debates on television and in print media on the shortfall in the allocation of the defence budget. Different people differently visualise as to what the ideal defence allocations should be. Some feel that the Indian defence budget should be at least 3 per cent of GDP while some other feel that India needs to competitively match the defence budgets of China and Pakistan, and few more seek enhanced budgetary allocation to quickly bridge the existing capability gaps of armed forces. The budget preparation process does not factor any of these perceived issues. This article highlights the budget-making process for armed forces and the need to prioritise defence expenditure specifically concerning the Indian Air Force (IAF).

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Image Courtesy: Sikorsky

Defence Procurement Procedure (DPP) stipulates a procurement planning process that includes long-term perspective through a 15-year Long Term Integrated Perspective Plan (LTIPP) covering three plan periods and medium-term perspective through a 5-year Services Capital Acquisition Plan (SCAP) covering one plan period.

LTIPP and SCAP include a list of capital procurements for capability development of all three services as envisaged, prioritised and enumerated by their Service Headquarters based on threat perception, emerging technologies, human resource aspects and predicted budgetary allocation.

LTIPP also merges similar procurements of two or more services to derive benefits from increased quantities. Besides, the LTIPP is shared in the form of Technology Perspective and Capability Roadmap (TPCR) with the Indian industry to help them understand the future needs of Armed Forces and plan their participation in defence procurements.

Every year a 2-year roll-on Annual Acquisition Plan (AAP) is prepared to list the capital procurements that can be processed during the financial year. AAP includes capital procurements extracted from the SCAP, which is a subset of the LTIPP. Both LTIPP and SCAP are approved by the Defence Acquisition Council (DAC) chaired by the Raksha Mantri while the AAP is approved by the Defence Procurement Board chaired by the Defence Secretary.

It is possible for the Service Headquarters to seek addition or deletion of procurements from the LTIPP and SCAP due to changed threat perception, emerging technologies or for other reasons. All such additions and deletions in LTIPP and SCAP require DAC approval.

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The DPP proposes completion of 16 procurement stages within 28 to 31 months (114 – 126 weeks) after the grant of ‘Acceptance of Necessity’ by the DAC, but in practice, this timeline is rarely achieved. Even the Comptroller and Auditor General of India has adversely commented on large delays in acquisitions due to a complex and multi-level approval process, where objections could be raised at any stage.

Service Headquarters prepare capital and revenue Budget Estimates (BE) by adding up all obligatory expenditures and 15% advance payments for new contracts to be incurred over the entire ensuing financial year. Obligatory capital expenditure includes committed liabilities, while obligatory revenue expenditure includes pay and allowances along with committed liabilities.

Expenditure on pay and allowances is predicted very accurately and so is the expenditure on committed liabilities as these are linked to time-based completion of contracted payment milestone(s). All funds earmarked for committed liabilities are rarely fully exhausted because delays in contracted milestone achievement commensurately delay the payment.

During budget preparation, advance payment is included only for those procurements that are either nearing completion of contract negotiations or are being processed for approval of Competent Financial Authority because the DPP stipulates almost 11 months from contract negotiation to contract signing, which is rarely achieved.

Based on the processing life-cycle, the budget allocation is actually for procurements initiated three years back or more, which are at the contract signing stage and has no bearing on other schemes in the pipeline. Also, the budget by itself can neither accelerate nor influence the capability building process, which follows the DPP. The breakdown of ₹ 4,31,011 crore allotted for defence in 2019-20 is tabulated below.

Government of India has allocated ₹ 4,31,011 crore for defence, which is 15.5% of its total expenditure and over 8% higher than the previous year’s allocation. ‘Defence Expenditure’ has been distributed amongst the three services following the regular ratio, with the largest revenue share going to the Army and the largest capital share going to the Air Force. The Government ensures no default on obligatory capital and revenue expenditures.

Unlike previous years, this year the allocation for new procurements is only for the remaining eight months of the financial year. Therefore, there should be no undue concern on the allocation of funds for armed forces.

Photo/Rohit Pandita

There is no denying the fact that all three services have an urgency to procure new capital assets and upgrade existing assets. The current precarious state of equipment of the armed forces is because of lack of modernisation over the last few decades, which cannot be overcome in one year only through a higher budgetary allocation. Only three major capital contracts are likely to be signed for Air Force this year related to Tejas Mk 1A, Akash missiles and additional AWACS while the scheme for 114 fighters is still at conceptualisation stage and the budgetary allocation for it would only be required couple of years later.

Capability building of armed forces should not be viewed only from the budgetary angle. A more prudent approach would be to analyse our capability to handle all perceived external threats combined with their probability of occurrence. The threat spectrum is very wide and their severity varies drastically from a small terror attack on one end to a nuclear attack on the other.

Given the world order, it is believed that the chances of occurrence of a threat reduce with the increase in its severity, wherein less severe threats have the potential to occur repeatedly. One could visualise various combinations of threats and their probability of occurrence but based on the experience of past few decades a logically put combination in order of likelihood of occurrence with inversely proportional severity would be a Pakistan sponsored terror attack at the very beginning of the spectrum, a skirmish with Pakistan post a terror attack, standoff between Indian and Chinese armies like the ones in Tulung La, Doklam and Demchuk leading  to a skirmish with China, conventional war with Pakistan, conventional war with China and a collusive threat from Pakistan and China leading to a two-front war.

At the other end of the spectrum is nuclear war with Pakistan, nuclear war with China and a collusive threat from Pakistan and China leading to a two-front nuclear war.

India has been a victim of Pakistan sponsored terror for over three decades and of late terrorists have attacked well-defended military installations. Fortunately, each time the terrorists were neutralised before they could cause much damage but the very fact that terrorists could enter such well-defended installations is a cause for serious concern.

Timely detection and neutralisation of terrorists before they cause any damage is likely to eliminate a likely trigger event that could even lead to a skirmish between India and Pakistan.

To counter sub-conventional and asymmetric threats, India needs to secure all vital installations including all airfields through all-weather multi-spectral sensor-based security surveillance systems, which can be centrally monitored to thwart any attempt of intrusion. All vital installations and airfields should have Quick Reactions Teams (QRT) manned by Special Forces at vantage points to challenge any intrusion attempt.

Image Courtesy: AFP

The QRT personnel need to be equipped with the most modern long-range carbines, personal communicators, bulletproof vests and helmets with night vision devices. Each of these establishments should be provided with bulletproof vehicles in adequate numbers to swiftly deploy QRTs at the incursion site and also for their subsequent replenishment and augmentation. The surveillance systems, specialist weapons, protective gear and bulletproof vehicles are not very expensive and these together can exponentially enhance the security of all vital installations, airfields, their personnel and assets.

Pakistan sponsored terror attack like Pulwama in the future could lead to a skirmish between India and Pakistan. IAF must build capability to launch airstrikes against terror outfits within Pakistan when required. A package of Rafale in combination with Su-30MKI and upgraded Mirage 2000 will provide India with a formidable offensive capability to penetrate and punish the enemy as and when required.

Rafale with ‘Scalp’ long-range air-to-surface missile will provide the capability to strike with less than 3-meter accuracy at targets in large parts of Pakistan from within the Indian airspace. Rafale with ‘Meteor’ long-range beyond-visual-range air-to-air missile along with Su-30MKI, upgraded Mirage 2000 and MiG-29 in combination with AWACS will be able to demolish any attempts by Pakistan to retaliate well before they reach Indian borders.

Further, the S-400 long-range surface-to-air missiles (SAM), medium-range SAM, Akash short-range SAM and Close-In Weapon Systems (CIWS) will provide superior capability to shoot down intruding aircraft and also their standoff air-to-surface weapons after release, like the bombs with Range Extension Kits (REK) dropped by Pakistan in their failed retaliatory attempt on 27 February 2019.

Once these capabilities in pipeline fructify and the systems are operationalised, India will be able to more aggressively employ its air power to counter Pakistan sponsored terror against India and impose unacceptable costs should it chose to respond.

The standoff between Indian and Chinese armies like the ones in Tulung La, Doklam and Demchuk have the possibility to trigger a skirmish with China. In such a situation, IAF must have the capability to rapidly air/heli-lift troops with their equipment to forward posts and thereafter ensure their sustenance and replenishments. Further, towards retaining its offensive capability the IAF should have options to swiftly disperse its assets to minimise their vulnerability to Chinese rocket forces and build large scale capabilities and capacities to undertake rapid runway repairs at all airfields.

Conventional war with Pakistan followed by one with China and a two-front war with Pakistan and China come next on the list as per their probability. While IAF has adequate capabilities to handle a conventional war with Pakistan, a well laid out plan to enhance capabilities of IAF for all eventualities needs to be implemented in a time-based manner.

With respect to nuclear wars, India has a ‘no first use’ policy and has developed and operationalised its nuclear triad for a credible minimum deterrence. Attention needs to be given to accelerating the anti-ballistic missile defence and creating large nuclear shelters and capacities for mass casualty evacuation and treatment.

Ministry of Defence needs to ensure that Indian armed forces have the requisite capability to handle the entire threat spectrum. Threats at lower end of the spectrum have a high probability of occurrence and capabilities to counter them can be expeditiously developed and implemented at low costs. On the other hand, threats at the higher end of the spectrum can be devastating but have a low probability of occurrence and building capabilities to counter them takes a long time and very high costs.

Post-1971 war with Pakistan, only the infantry and artillery of the Army and all elements of IAF have participated in all skirmishes including the Kargil war. Since the budgetary allocation will always be constrained, it is important to develop capabilities of armed forces to counter threats across the entire spectrum but give higher priority towards developing capabilities that can counter threats with the highest probability of occurrence.

By Air Marshal SBP Sinha (Retd)

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of BharatShakti.in)