The 100,000 crore Rubicon - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Tuesday 30 January 2007

The 100,000 crore Rubicon

by Ajai Shukla
Business Standard: 21st Nov 2006

Foreign Secretary level talks with Pakistan; the US-India nuclear legislation passed by the US Senate; Chinese President Hu Jintao visiting India. This fortnight makes a useful diplomatic freeze frame, illustrating India’s growing stability in the neighbourhood, region and global environment.

Now contrast this reality with New Delhi’s threat perception. It is difficult to measure a country’s apprehensions accurately, but one fairly good indicator is the trend in its defence spending. As President Hu lands in Delhi, South Block is finalising estimates of the Rs 89,000 crore defence budget for 2006-2007. Then they will finalise next year’s budget demand, likely to be just shy of Rs 1,00,000 crores. With the military, like all militaries, asking for more, and the strategic community clamouring to spend 3% of GDP on defence (which would be Rs 1,20,000 crores) the Rs 1,00,000 crore Rubicon no longer looks uncrossable.

In itself, that would merely be a statistical landmark. When a country’s security is under threat, it spends whatever it takes to restore wellbeing. And since there is no way to accurately measure either security or wellbeing, a comparison is useful to assess whether India’s current threats justify its spiralling defence spending.

In 1999, India paid 48,500 crores for defence, including the cost of the Kargil conflict; today we are looking at twice that amount. That’s a sizeable jump, considering that inflation is high mainly for foreign weaponry, and no pay commission has raised salaries since then. This rise in defence spending raises two key questions. One, have India’s levels of external threat or insurgency climbed proportionately in the seven years since 1999? Two, is our spending directed towards our greatest concerns, or are low-threat spending areas eating up most of the budget?

A series of recent events and statements answer the first question. Three years into a peace process with Pakistan, the PM has declared it irreversible. While the parliament attack in 2001 and the Kaluchak attack in 2002 brought India to the brink of war, the Mumbai bomb attacks this year evoked no more than a two-month sulk. Terrorists, we are told, can no longer hold the peace process hostage. A ceasefire holds on the Line of Control. And with nuclear deterrents in place all around, structure underpins the statements.

In step with growing trade relations with China, the Sino-Indian border is entirely peaceful. Both countries have not just scaled down their soldiers, but also their interaction, replacing patrol clashes with volleyball matches and friendship toasts. Wen Jiabao and Manmohan Singh’s agreement last year on political principles for a solution to the border issue is a great leap towards a final solution; the outcry against China’s recent reiteration of its claim on Arunachal come from those unfamiliar with Beijing’s negotiating history. Chinese maps now paint Sikkim in the same colours as India. Compared to 1999, war on any front—Pakistan or China—is a remote possibility.

What about insurgency? The Nagaland ceasefire has stabilised and peace emissaries are talking to ULFA. In J&K, a halting dialogue with separatists has moved forward since 1999. Despite two failed ceasefires with the Hizb-ul-Mujahideen, ongoing back-channel negotiations could soon result in a successful one. A border fence is checking militant infiltration. J&K and Manipur remain crippled by militancy but their situation is considerably better than in 1999.

In mature democracies with vibrant civil societies, a transition from hostile confrontation to dialogue and stability provokes a demand for defence cuts. In India, a “guns versus butter” debate is controversial ground that few want to tread. But with war increasingly unlikely, and militancy not quite dead but in retreat, can a doubling of real defence expenditure pass unquestioned? When will it be time for a peace dividend?

Even more worrisome than growing defence spending is India’s pattern of spending. The most cursory analysis of ongoing programmes shows a marked trend towards “warfighting” equipment like tanks, submarines and fighter aircraft, which have no utility in the counter-insurgency operations that appear to be our primary defence requirement. This bias also exists in indigenous R&D, where big-ticket programmes like missiles, anti-aircraft guns and tanks mop up a mind-boggling Rs 5,000 crores. But then, big-ticket items mean bigger research budgets!

Serious defence preparedness has become the neglected step-child of a jingoistic and xenophobic polity, whose members find it easier to wave the tricolour and throw big money at defence rather than sit down to a rational assessment of India’s defence needs. While strategically sophisticated countries like the USA and the UK carefully scrutinise their defence aims and requirements—Washington publishes a comprehensive Quadrennial Defence Review every four years–India’s defence needs have never been coherently formulated. A public debate remains a distant dream.

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