India’s Defense Budget and Counterterrorism: A Thought

The recent article in the New York Times on India’s defense has some eye-popping numbers. The main news event is, India is looking to buy new fighter planes, and may spend as much as $10 billion on them. American arms manufacturers are chomping at the bit, especially as there are probably other big arms purchases in the pipeline. (For reference, last year’s entire defense budget is between $20-25 billion, according to this source; it may be an underestimate, however.)

I was thinking about this with last week’s terrorist attack in Hyderabad in mind, as well as with the ongoing problems with the Naxalites in the east and south. While I’m not by any means suggesting that India cut back on its defense spending, I do wonder whether the investment on hardware such as advanced fighter jets is really addressing India’s current (and likely future) military needs. Especially with a serious terrorism problem as well as ongoing internal uprisings, isn’t it possible that other kinds of military expenditures might be warranted? How do fighter jets help with terrorism or guerilla warfare?

India is developing and moving forward in many ways, but in controlling terrorism in its cities I think it has been relatively unsuccessful. Previous bombings in Mumbai and elsewhere in the past two years have usually followed a similar pattern: 1) intense police activity for a few weeks coinciding with nonstop media coverage, 2) possibly some suspects are detained who may or may not be the right people, and 3) everyone forgets, coinciding with a new media obsession. Security measures to prevent repeat attacks are generally not instituted.

There is a similar failure in suppressing the activities of Maoist rebels, who continue to inflict serious casualties on police as well as civilians; meanwhile police in some districts struggle to get adequate funding.

I’m not saying I have a pat answer to these problems. Rather, I’m wondering if a change in thinking about military spending and technology might be advisable. Admittedly, it could be argued that counterterrorism and Maoist rebels are really police, rather than military, issues, but given the number of deaths involved and the tactics used by rebels and terrorists alike, isn’t it possible the thinking should change? Aren’t there creative ways to use military resources to improve domestic programs to handle Naxalite insurgents in the countryside and terrorists in the cities?

I also wanted to state that I’m not saying India doesn’t need modernized jets. They serve a strong deterrent purpose, and I’m actually not opposed to the current proposed purchase. It’s more the overall budget picture and emphasis on hardware and technology for “the last big war” that concerns me. I do not see any future military conflicts in the nuclear-armed Indian subcontinent playing out along in conventional form. I think there will either be more Kargil-like small wars, proxy fighting via guerilla fighters armed by one or another state, or — and I hope to God it never happens — full-on nuclear annihilation. Finally, here are a couple of facts I came across as I was thinking about these issues this morning:

  • As I Googled around I was surprised to find that despite some major increases in Defense spending, India’s total military budget is still at or under 3% of its GDP, which is less than Pakistan or China. (It helps that India’s GDP has been growing at robust rates; this keeps the number down).

  • India’s Defense spending is still more than three times the budget for Education, according to the numbers given here. Not really a surprise there.

  • I was also surprised to find that upon coming into power in 2004, Finance Minister P. Chidambaram sharply increased military spending. I would have expected the opposite, given that the current UPA government is a left-center coalition, while the previous NDA government was more hawkish in tone.

62 thoughts on “India’s Defense Budget and Counterterrorism: A Thought

  1. boondoggles like the NREG

    You wanna talk a little more about NREG, and please spare the NREG specific neoliberal BS that ‘I am such a cool libertarian’ Amit Varma and the folks at Indian Economy Blog do.

  2. Amardeep, One more minor point. It is not surprising that the UPA policy in defense issues is not very different from the supposedly “hawkish” NDA govt. The “hawkish” vs “soft” distinction is a fiction on matters of national defence and foreign policies, and there is usually a consensus across parties. This includes everything from nuclear policy (P.V Narasimha Rao laid the groundwork for the 1998 tests, and the 13 day Vajpayee govt executed them, similarly the later NDA govt of Vajpayee began the talks on the nuclear deal and the current UPA govt is seeing it to completion) down to counterinsurgency and counterterrorism strategies, and also defense purchases. So the recent orders for new purchases should not be too surprising.

    I also think the choices regarding spending are rather difficult ones to make. It is true that counterterrorism mechanisms have to be made more efficient, but this is particularly hard in India due to many political as well as financial constraints. Secondly, given the magnitude of the terrorist infrastructure directed against India and its citizens, it is not entirely surprising that there is on average, one or two major terrorist incidents. Secondly, India does need a conventional force, as Kargil demonstrated clearly. The neighbourhood India is in is one of the most challenging ones in terms of threats to security.

    Personally, I am a bit upset that education spending is not as high or higher than defence, and I do hope this is rectified. Much as defence is important, surely education is at least as, if not more important.

  3. Ardy…please spare the NREG specific neoliberal BS that ‘I am such a cool libertarian’ Amit Varma…

    Ardy your sentiments are appreciated, but they are still just that, sentiments. I have no use for terms such as libertarian or neo-liberal or conservative for that matter. At present much of the criticism concerning free-money schemes like the NREG is simplistic BS that you would expect to find on the OpEd pages of the LiveMint and the WSJ, the Mint’s elder cousin. But there is a lot of stupid ideology and method at the core of these schemes that is worth criticising that I hope will draw the attention of better informed folk and not simply sports and music writers.


    If anything the NDA has simply followed the ‘hawkish’ Indian security policy formulated around the late 1940s championed by founders such as Patel and Ambedkar among others. To be secure on land, we must be supreme at sea so said Jawaharlal Nehru, over 50 years ago, and not Vajpayee in 2000. Nobody in the political or administrative establishment has ever believed that India’s interests can be secured by force of arms alone. Defence spending is a big chunk of the union budget because even in a mixed/public-sector dominated economy like India’s the military sector is the largest cost centre for the union government. But when you look at the GDP that gives you a measure of total national economic activity, defence spending as you can see accounts for 2-3%. But unlike some other economies, development spending too accounts for about as much. Even assuming someone could think of a way for the Centre to spend as much on education and health as it does on defence, no one would know how to spend that much of money! Because at present the Indian government’s involvement with the primary education sector is minimal, much of the money being spent by the States and local governments. So the GDP ratios give us a better idea of what we could be spending. But now that revenues are buoyant and the economy is growing there may be more money for everyone. In the days of the Republic the planners believed that the economy would arive at this stage sometime by the mid-60s. Better late than never.

  4. Jyotsana #53

    Can you please elaborate on the same since I am curious to hear why you feel the NREGS is such a bad idea. I would concede that it has potential for exploitation in terms of corruption (like everything the great minds of Indian polity come up with), but I would guess your opposition to it has to do with other things. Reasons such as ‘It is just an income redistribution scheme and thus bad’ or else ‘It does not add to the productivity of the nation’ do not convince me. Plus I am not as convinced it is a free money giving scheme, based on my conversations with on the ground activist and rural folks using the NREGS.

  5. Ardy,

    What are the problems with the NREG? The scheme simply ignores endemic problems. Where shall we start? Leakage due to an 85% overhead being the norm in centrally funded developmental projects – the lopsided employment:sectoral GDP in agriculture (IIANM 60%:30%) – broadcasting from the highest level; worsening an already lopsided economic balance that heavily leans towards the centre; doing nothing about the diminishing ability to manage revenue as one moves from the centre to the periphery; being yet another yojana; coming out of the self-same give-away-hand-out-let’s-hold-no-one-accountable school of thought that everyone seems to forget. What difference does it make in spending more on primary health centres or primary schools if the employees who are supposed to run them never turn up for work?

    In #53 that should have read

    In the early days of the Republic the planners believed that the economy would arrive at this stage sometime by the mid-60s.
  6. Jyotsana – I think (and I may be wrong) you are saying that in terms of what the Govt. is doing, it’s not good because it is

    • too centralized
    • has high overheads
    • employment to productivity ratio in agriculture is high and this scheme just adds more manpower

    Is my understanding of what you are saying right?

    I am not sure if it is that centralized as some other scheme where the big boss controls everything. Primarily because it’s the people who are most affected and have the power/knowledge to decide what they need to do to improve their lot, decide so, do their thing and then get paid. I am not as convinced it is such a big issue from the perspective of the people. Sure the money comes from the central coffers and thus plenty of room for things to be less efficient or go wrong. But to think of it, the way the system is can it really change overnight?

    Similarly, in comparison to a complete inaction and no productivity or Govt. doing anything, people doing their own thing albeit not as efficiently may be high overheads to you, but I feel an inefficient system is still better than a system doing nothing or being inexistent.

    Lastly, with the way the agro economy is with a gap between seasons, this scheme provides for 100 days in a year, the days which are spent doing nothing between seasons by farmers. Thus you are not really employing more people into the agro economy, you are getting those people who sit idle for some amount of time to do things that will improve their efficiency (think canal system development, etc etc) when it comes to main agriculture seasons.

    I think the difference is you are coming from a systemic approach which I agree, the Govt. needs to do a lot better. But knowing our Govt. I’ll take what it gives and use it to it’s full potential. I am coming from a peoples perspective – to me this is at least better than the Govt. doing absolutely nothing. Thus people on the ground are trying to use it to the maximum, they are finding projects that villages can take up which will help the villages themselves in the long term either agriculturally or to improve their own quality of life, they are carrying out peoples audits using RTI to make sure that the money paid in the Govt.s sheets is actually being paid out. To me, this 100 days of Govt. employment for things that the people need most coupled with transparency through RTI is better than schemes that the Govt. came up with in the past.

  7. Ardy,

    I have no absolute views (assuming what I think matters at all) on the role of the government or the ‘market’ and in fact am all admiration for the much maligned US Federal Government. Purely market based economies do not exist. Further only a capitalist society can generate enough surpluses to run a welfare economy. Government intervention works best in times of poor demand, deadlocked markets (as happened with the stagnant US aircraft industry at the eve of WW1), and in fields where uncertainty outweighs risk (which is why you have NIH, NSF, etc.).

  8. I read a comment above talking about pat-downs and other such airport-style security. It reminded me a bit of when I used to take the train to Jammu frequently. If you have been, you know that there is an attempt at trying to keep the place secure. There’s those sinister rolls of barbed wire around the whole place that makes it look like the next train is heading straight to Auschwitz. There are the luggage scanners. There are the police standing around everywhere, doing nothing. But in the end, if you wanted to bring a bomb onto a train or onto the platform, it would be a snap. Afterall, its an Indian train station. Checking everyone is just not feasable. All the barbed wire and security measures are accomplishing is increasing the chaos and making little children bleed. So I have to question these security measures. The intentions are good, but I don’t think they are very effective at all. How would you keep an indian train station safe? I haven’t a clue. I think it could be done much more easily in Pakistan. But this is Jammu. Imagine if they tried this style of security at Churchgate. I mean, Chhatrapati Shivaji.

  9. I fully support Ardy’s views too. I have had the pleasure of being exposed to how NREGA and RTI acts have started delivering better lives for villagers. The social audit scheme of NREGA gives tremendous power to the people in making sure the act is implemented justly. This is a very impressive policy wherein govt is suggesting, we are unable to curb corruption,so we are trying to empower people to come up with ways to find out malpractices and make sure they such people don’t go scotfree. For example see these reports, such audits are making sure the money is not going into corrupt pockets, and hence these are not the same old yojanas but they do really empower the people. Sorry about the threadjacking, but had to spread the awareness about these schemes when it was suggested these are not good schemes.

  10. Churchgate. I mean, Chhatrapati Shivaji

    Daniel, Err. small nit… but its VT ( Victoria Terminus) that is Now Chhatrpati Shivaji NOT Churchgate

  11. to bg | August 31, 2007, asshole what o u think about India my country is the best never ever dare to say that India will be ruined by china