[op-ed snap] The battle for money


Mains Paper 3: Economy | Government Budgeting

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Recently, the army said to the Parliamentary committee on defence, “The 2018-2019 budget has dashed our hopes … The marginal increase barely accounts for inflation and does not even cater for taxes.” The newscard discusses some important points related to this issue.



  1. Funds shortage is affecting the preparedness of the armed forces, but the government has chosen to ignore the crisis

No lesson learned from the history

  1. In 1999, India was forced to request Israel, in the middle of a Kargil conflict, to fly in emergency supplies of ammunition and spares
  2. As India planned “surgical strikes” in Pakistan occupied Kashmir, it was worried about an escalation of conflict
  3. Certain types of ammunition were again in short supply, and in some urgent moves, India was forced to fly the ammunition in from friendly countries
  4. The lessons from either Kargil or surgical strikes have clearly not been learnt by the government

The current situation

  1. The situation has only worsened in the past year, and any hopes of improvement were belied in the recent budget
  2. The vice chiefs of the three services were recently compelled to speak the unspeakable to the parliamentary standing committee on defence
  3. The army vice chief has recently told the MPs that 68 per cent of army’s equipment is vintage,
  4. And the capital budget doesn’t even cater for the committed payments of 125 ongoing procurement deals, leave alone provide funds to replace the vintage equipment
  5. GST: On top of that, the army will be saddled with an additional bill of Rs 5,000 crore due to increased taxes because of GST but no additional money has been made available for it
    No different situation for the Navy and the Air Force
  6. They don’t have money to even pay for the ongoing procurement deals, and haven’t been allocated funds for additional payments to be made towards custom duties

What is the main issue?

  1. Senior military officers feel that a belief has gained ground at the highest levels of the government that a war is an absolutely impossibility in today’s times
  2. Whether it is due to the presence of nuclear weapons or structural geopolitical factors or a blind faith in India’s diplomacy is a matter of debate, but its consequences are damning
  3. Driven by this view, the government accords a lower priority to the demands of the defence services, whether it be in budgetary support or in implementing major defence reforms
    Raksha Mantri’s Directive
  4. The role and tasking of the defence services is decided by an official document called the Raksha Mantri’s Directive
  5. Notwithstanding the government’s belief about impossibility of war, it has not amended the directive to the defence services accordingly
  6. Nearly four years into office, the current government has not been able to issue a fresh directive to the defence services despite numerous deliberations on the draft of the directive a couple of years back

The way forward

  1. In all likelihood, the issues of tasking have already been broached informally with the government by the defence services
  2. If the alarming situation persists, the matter is bound to be raised more forcefully in the future
  3. The government must act quickly not merely to avoid that embarrassment but for the larger goal of ensuring India’s national security
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