India’s defence budget for 2012-13 at Rs 1.93 lakh crore (about $40 billion), although high in monetary terms, is in keeping with plans to modernise the country’s armed forces. A major portion (Rs 1.08 lakh crore), however, is for revenue expenditure. The critical component of the defence budget is the capital budget which has been pegged at Rs 79,579 crore. About 70 per cent of this capital expenditure is projected to be spent on servicing existing contracts.
Some of the big ticket items India is expected to sign contracts for in the near future are the purchase of 126 multi-role combat aircraft at $20 billion, 145 ultra-light Howitzers, 75 Pilatus PC-7 Basic Trainers at $600 million, C-17 Globemaster heavy lift transport aircraft and several warships and submarines. In all, India is projected to spend about $50 billion on defence procurement over the next decade in keeping with its major defence modernization programme. Even so, India’s defence expenditure is far behind that of China which for the first time has crossed the three digit mark at $ 106 billion. The hike of about $10 billion over the previous fiscal figure of $ 95.6 billion appears to be notional considering the size of the Chinese armed forces, which is the world’s largest, and the vast geographical spread of the country. But the true figure of China’s defence budget is possibly higher and is under-reported because of lack of transparency by that country’s communist regime. For India, which has a longstanding border dispute with China, however, the latter’s defence budget remains of considerable significance.
India’s armed forces are mostly equipped with imported weapon systems, which does not present a comfortable picture. In contrast to China, which ranks among the top 10 exporters of defence equipment, India’s defence exports are insignificant.India needs to seriously focus on strengthening its military industrial complex and build competencies in core and critical areas which are either very expensive to buy or difficult to obtain from other countries. Defence involves big monies and it would be far better if India spent it on building and strengthening its indigenous capabilities.