National Defense Budget

National Defense Budget in India

Economic defense cost in India

A new dimension of the need for higher defense spending to protect India from upheavals is compounded by the growing dangers posed by the threat of international terrorism.

India’s defense budget

The appropriations for the defense budget in India are made in terms of “current rupees “, which is the usual practice followed around the world. For purposes of purpose and long-term planning, defense costs may be designated in terms of “constant rupees”, which has the advantage of decounting the inflationary factor. Evaluating defense spending in “real terms ” allows other deflators to be applied, such as currency fluctuations that would allow the actual value of the defense rupee to be reported. In order to compare the economic burdens in defence accepted by different nations, some generally accepted means of comparison are possible, in particular by indicating defence spending as a percentage of gross domestic product (GDP) or Expenditure of the central government (GCE).

The Constitution of India contemplates legislative, administrative and financial control over the armed forces in India which confers on the central Government; Therefore, to include the expenditures of state governments for comparison purposes is inappropriate, although some analysts in India have found it useful. There are other parameters that can be used to express the burden of defense, such as its per capita amount or the size of the armed forces in relation to the population of the country, but they are not useful for conducting comparison studies.

Characteristics of India’s defense budget

The Indian government disapproves of the need to incur defense spending by suggesting in a rather conscious manner that it is only providing the minimum irreducible disbursements required. The official explanations are as follows: “The commitment of defense planners is to balance the minimum maintenance requirements of the defence Forces and the need to modernize them, without improperly forcing the economy ” (Ministry of Defence , annual report, 1997-1998, page 12); and “Given India’s size and security concerns, defense spending, assessed as a percentage of the total expenditure of Central government or gross domestic product, remains one of the lowest among neighboring countries ” (Ministry of Defence, Annual Report, 1999, p. 16).

India’s defense spending since the 1960 does not reveal any pattern of incremental growth, but it suggests that periodic increases have been reactive to external conflicts and internal dynamics. The most important external factors were the wars that India carried out against China and Pakistan: The China-India border Conflict (October 1962); The second Indo-Pak War (September 1965, preceded by the operations of Kutch in April 1965), the third Indo-Pak War (December 1971), which led to the creation of Bangladesh; And the conflict of Kargil (May-July 1999). The accumulation of the Kashmir Control line for a year and the border confrontation between India and Pakistan (December 2001-October 2002) were also responsible for dramatic increases in the defence budget. These periodic additions to India’s defense budget occurred in the years following these conflicts and reflected the high costs of replacing the lost equipment, compensating for perceived deficiencies in weapons systems, and increasing Preparation for the defense. The main internal factors that were responsible for dramatic increases in defence allocations were necessary to implement the issues of the 1974, 1986 and 1996 payments commissions.

Staff and military personnel-related costs have risen dramatically over the years due to the generosity of successive indigenous payment commissions. The recruitment of young people suitable for the armed forces in India has become progressively more difficult for several reasons, mainly availability, as India was modernising its economy, attractive employment opportunities in Civil occupations and the disincentive of difficult living conditions and the risks inherent in the military profession. At the same time, the high value and complexity of modern weapons systems makes it imperative for the armed forces to recruit a fair share of available talent by offering larger compensations and more attractive bonuses; These have meant greater labor expenditures that approximate more than 40 percent of the defense budget in India.

Military pensions have also increased exponentially over the years because of the cumulative effects of payments from the Payments Commission and the rapidly growing longevity of pensioners due to improved health conditions in India. Since 1984-1985, military pensions have been related to civilians, and now account for about 20 percent of defense spending.

India’s major weapons systems were of Soviet origin, available at “Political prices “, and still account for about 70 per cent of the weapons in the armed forces. Over the years, the spare parts and accessories needed to keep these systems running have become increasingly difficult to acquire, and also much more expensive, as they are now available only at market prices. India is now diversifying its sources to obtain military supplies by turning to Western countries and, increasingly, to Israel. These acquisitions, available only at commercial and market prices, significantly increase defense costs and expenses.

Factors Influencing defense Assignments

Defense spending in India is based on the threat perceptions that may have the strategic Military High Command and its corresponding policy line, including, of course, the defense minister, who influence the decision-making process. These special interest groups include the three service offices (Ministry of Defence, Ministry of Finance, Ministry of Defence Finance Division), the Standing Committee of Parliament of Defense and political parties. Other, but less significant, groups are public opinion, foreign arms suppliers, and domestic contractors who meet defense requirements.

In addition, there are an increasing number of retired civilian and military officials, media personalities and academics who are actively involved in the seminar circuit and in print or electronic media. The official articulation of India’s threats to national security emphasizes its external dimensions and the dangers emanating from its strategic location on the northern Indian Ocean coastline, as well as its proximity to volatile Gulf regions, Asia Central and Southeast Asia. But it is perceived that the main military threat emerges from Pakistan, with its support for Islamic militancy and terrorism in Kashmir, and also, especially considering its size, from China.

A threat to cross-border security is perceived, at certain times in history, especially by the non-governmental components of India’s strategic elite, emanating from non-military sources of insecurity, including international terrorism, The smuggling of weapons and drugs, organized crime and money laundering, in addition to forced migration to decay. These threats require regional and global solutions. Moreover, India’s major security threats arise from internal factors, including uprisings, communal and caste conflicts, and the growing threat of indigenous extremist movements that have spread across various parts of the country.

Cumulatively, these perceptions, even subjective, of threat, guide the process of defense planning. Their basic determinants have been identified as the need for a two-front defense to secure borders with Pakistan and China; The need to acquire an independent deterrent, as it goes against India’s foreign policy the Union to any military alliance or strategic grouping, unlike Turkey; The inevitability of large-scale involvement of the armed forces in internal security functions; and India’s strategic interests in the North Indian Ocean, its exclusive economic zone, and the defense of its island Territories, highlighting, as is the case with Vietnam, the need to have an army worthy of its name.

Categorizing India’s defense budget

Expenditure estimates in the defence budget are classified into five large sections; Four are in the income statement (for the Army, Navy, Air Force and artillery factories), and the fifth in the capital account. Military expenditure can be divided into six major categories: salaries and diets of armed forces personnel; Payments to industrial establishments employed by shops, warehouses and factories; Transportation and miscellaneous expenses; Shop purchases; It works expenditure; And capital outlay such as capital works, purchase of boats, plants and machinery.

The distinction between income and capital expenditures in India’s defense budget is an inherited British practice, which is not very satisfactory. In theory, income spending should not result in the creation of permanent assets. Capital outlay is spent on the acquisition of land, buildings and machinery. This distinction is artificial, as expenses in small and temporary buildings were classified as income. But it also included disbursements in aircraft, aviation engines, and the naval fleet, which were anomalous. After 1987-1988, these last disbursements were classified under the heading capital, which also includes spending on heavy and medium-sized vehicles, equipment and buildings worth more than 200.000 rupees and a life of more than seven years.

Another way to classify the defense budget is to differentiate between staff disbursements and personnel-related costs, maintenance costs, and modernization costs. This classification disaggregates defence expenditure in terms of its main functions, allowing its use for a more purpose-oriented and more useful orientation. Empirical experience with regard to the use of India’s budget reveals that any reduction in it or any unforeseen expenditure requiring adjustments in the defence budget has a negative effect on the modernization effort of its Armed forces, although, as an exception, the costs of military personnel, by national policy, are never affected. This leads to a decrease in the operational capacities of the Indian armed Forces, because the armament becomes obsolete, there is a lack of essential military equipment due to the shortage of spare parts and accessories, and also a training Inadequate force.

Effect of Nuclearization

India’s nuclearization has not led to any reduction in defence spending, although the protagonists of the Indian bomb had previously argued that this would lead to a reduction in disbursements in conventional armaments. This decline has not happened; Instead, India’s defense spending has almost doubled since nuclear testing in May 1998. India’s commitment to its Nuclear doctrine to deploy the strategic triad of terrestrial missiles, long-range bombers and submarine-launched missiles, in addition to establishing the required command and control arrangements, and alert systems Early to achieve assured second-strike capability, the defense budget will increase considerably. The prevailing thesis is that disbursements in conventional forces will have to increase simultaneously to ‘ raise the nuclear threshold ‘, so that the conditions conducive to the early use of nuclear weapons in any conflict are not created.

Rivalries between services also increase expenses, as each service manager wants to be remembered for the bonuses he got for his own unit or service, and the weapons systems acquired during his tenure. The establishment of the strategic triad has much to do, therefore, to satisfy the aspirations of the army, the Air Force, and the Navy to acquire their individual nuclear forces. For this reason, it seems inevitable that spending on nuclear weapons and their delivery systems will grow over time, as are disbursements in conventional forces. Therefore, there will be no savings in the appropriations made for the defense.

As a percentage of India’s GDP, the defence budget ranges between 2 and 3 per cent, and between 13 and 16 per cent of the CGE. This is by no means an unbearable economic burden on India. However, it should be remembered that between a third and a quarter of India’s population (approximately 300 million) live below the poverty line and are deprived of the most basic needs of food, housing, education and public health. Viewed from this perspective, defence spending, which has steadily increased, reduces the funds required to meet the basic needs of India’s poor, which represents significant wasted opportunity costs.


See Also

Armed forces
Military Law


Defence Services Estimates, 2003–2004. New Delhi: Government of India, 2003.

Kargil Committee Report, published as From Surprise to Reckoning. New Delhi: SAGE Publications, 2000.

Ministry of Defence. Annual Report, 1999–2000. New Delhi: Government of India, 2000.

Ministry of Defence. Annual Report, 2002–2003. New Delhi: Government of India, 2003.

Chari, P. R. “Defense Expenditure in India: Can It Be Reduced?” In Defence Expenditure in South Asia: India and Pakistan. RCSS Policy Studies 12. Colombo: Regional Centre for Policy Studies, 2000.

Ghosh, A. K. India’s Defence Budget and Expenditure Management in a Wider Context. New Delhi: Lancer, 1996.

Rao, P. V. R. Defense without Drift. Mumbai: Popular Prakashan, 1970.

Singh, Jasjit. India’s Defense Spending: Assessing Future Needs. New Delhi: Knowledge World, 2000.

Thomas, Raju G. C. The Defense of India: A Budgetary Perspective of Strategy and Politics. Delhi: Macmillan, 1978.

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