Defence Planning and Budget Dilemma

Since the implementation of the FRBM Act in 2004, the Ministry of Finance (MoF) has, through the union budget document, been indicating the likely defence budget allocation for a further two years. A regular recurring feature of the reports of the Parliament Standing Committee on Defence, while examining the demands for grants of the defence services, is that “funds allocated for both the capital and the revenue budget are much less than the demands projected.” Responding to the implications of the shortfall in allocation, the Ministry of Defence (MoD) has always responded that as far as capital budget is concerned, the procurement plan for capital modernization schemes may have to be reviewed and re-prioritized, based on the available funds. In the case of revenue MoD, the standard response is that after meeting the salary and other obligatory expenses the balance allocation available is distributed to meet the requirement of stores (including ordnance), transportation (of personnel and stores), revenue works and maintenance, etc., resulting in an ever shrinking share of funds for operations, maintenance and works. The implications of this recurring shortfall on “capability building” and “operational preparedness’ are never mentioned.

It is a similar case with the Defence five year plans. The plans are drawn up and submitted by MoD without taking in to account the likely availability of funds and the Standing Committee in its reports is critical of the defence plans not receiving approval. The government decided to do away with the five year planning process in 2014. Therefore, there is no 13th plan. Despite this, MoD has gone ahead and formulated the 13th five year plan and submitted it to MoF for information only. Thus, the dilemma of defence planning and budget continues.

About the Author

Group Captain Vinay Kaushal (Retd) is Distinguished Fellow at the Institute for Defence Studies & Analyses, New Delhi.