Why India should Deploy Dedicated Defence Satellites?

Radhakrishna Rao, 
Visiting Fellow, VIF

The successful launch of India’s advanced communications spacecraft, GSAT-7 by means of an Ariane-5 vehicle of the European space transportation company, Arianespace, on August 30 has come as a shot in the arm for the Indian defence set up. For this 2,550-kg multi band satellite designed and developed by the Indian Space Research Organisation (ISRO) will serve as an exclusive satellite of the Indian Navy, the youngest of the Indian services. The significance of GSAT-7 lies in the fact that it is the first dedicated military satellite that India has put in place. As envisaged now, the safe and reliable communication channels provided by GSAT-7 satellite, will help the Indian Navy strengthen its blue water combat capabilities in all its manifestations. With its 2000 nautical miles footprint over the Indian Ocean Region (IOR), GSAT -7 will help Indian Navy network all its 140 warships, 13 submarines and 200 aircraft along with its ground based “resources and assets.” Specifically, GSAT-7 will serve as a “force multiplier” by sharpening Indian Navy’s edge in terms of network centric operations. On another front, it will provide the Indian Navy the necessary level of expertise for its seamless integration into the tri service aerospace command, the formation of which is awaiting clearance from the Government of India. More importantly, the robust communications link up facilitated by GSAT-7 will substantially enhance India’s maritime security over a wide swath of eastern and western flanks of IOR. GSAT-7 communications space platform is well equipped to serve as a “sensitive command post” in space over IOR and help transform the entire maritime domain awareness of the Indian Navy.

With a view to boost its striking punch and also expand its area of influence, Indian Navy is working on a well conceived strategy to link up its long range missiles, radars and air defence systems on all the sea based assets to a central room through a highly reliable satellite network made available by GSAT-7. The synergy between combat platforms moving in the high seas of the world with the land based nodes through GSAT-7 capability would help bring about a radical shift in the operational strategy of the Indian Navy .There is no denying the fact that a satellite based communications network is immune to many of the “deficiencies and limitations” associated with a conventional communications system. As a follow up to GSAT-7, it is planned to launch GSAT-7A for the exclusive use of the Indian Air Force (IAF).

Meanwhile, Defence Research and Development Organisation (DRDO) has revealed that in the years ahead it is planned to launch a range of dedicated military satellites for the exclusive use of the three wings of the services. Clearly and apparently, there is a growing realization that satellites could serve as “ears” and “eyes” of the defence forces on the lookout for a strategic lead. Of course, ISRO has maintained a stoic silence over the use of GSAT-7 by the Indian Navy. For being a civilian space agency, ISRO cannot openly associate itself with a space defence project. GSAT-7, which is the last of ISRO’s seven fourth generation communications satellites, would provide a substantial level of expertise for the optimum utilization of military oriented space platforms that India will launch in the years ahead.

By all means, the Indian Navy is keen on acquiring a range of spacecraft meant for a variety of end uses. For the tech savvy Indian Navy is fully well aware that ocean watch satellites snooping on the naval movements, electronic ferret satellites gathering data on radio frequencies, meteorological satellites predicting weather to facilitate an effective use of the weapons systems, navigation satellites guiding lethal weapons to designated locations with an unfailing accuracy, reconnaissance satellites providing vital data on the strength of the potential adversaries and the communications satellites ensuring a real time link up for the effective use of the resources have all become vital components in the mechanism of the modern day warfare. But then for now, GSAT-7 located over the Indian Ocean will enable Indian Navy to stand up to the expanding Chinese influence in the IOR. As strategic analysts observe, with China beefing up its presence in the Indian neighbourhood including Sri Lanka, Bangladesh, Myanmar and Maldives through its much hyped “string of pearls” strategy, India should make vigorous efforts to realize a versatile, robust satellite based surveillance network designed to enable Indian Navy enhance its vigil in the Indian Ocean Region with the objective of warding off any threat to the Indian mainland.

Indeed, not long back, Dr.V.K.Saraswat, the former Scientific Adviser to the Indian Defence Minister had rued the fact that the tremendous strides made by India in space exploration has not gone to fill the gap in India’s capability to create space assets designed to help Indian defence forces meet the challenges of the future. According to him, in a futuristic battlefield scenario, successful operations of the defence forces on the ground, sea and air would depend on how efficiently space resources are exploited. Any denial of access to space would mean a clear cut set back to military operations at all levels. As such, ensuring the security of space assets too has assumed more than usual importance.

Space based assets are also critical to the flawless functioning of the Ballistic Missile Defence (BMD) shield being put in place by DRDO. Indeed, in the context of rapidly changing global security scenario, the need for a range of satellites equipped with electro optical sensors and Synthetic Aperture Radar (SAR) for early warning and other strategic purposes has become all the more pronounced. Currently, Indian defence forces have a limited access to the INSAT communications and IRS earth observation spacecraft constellations being operated by ISRO. But with the possibility of fighting a battle on the two fronts being very much on the cards, Indian defence forces are clearly in need of a wide variety of dedicated satellites to stay at the winning edge of the war.

But then ISRO’s civilian mandate and nature of operations focused on exploiting the fruits of space technology for the socio-economic development of the country, could act as a significant check on the attempt of the Indian defence establishment to involve the Indian space agency in a big way in realizing a resurgent space defence capability. However, technology developed by ISRO for its satellites meant for earth observation, communication and other end uses could well serve as a test bed for future military space projects. In the context of the efforts to revive the spectre of space war, as highlighted by the Chinese and American moves, India’s political leadership should seriously consider the issue of giving a military edge to India’s exclusive civilian space programme. Not surprisingly then , strategic analysts hold the view that launch by ISRO of increasingly capable, higher resolution earth imaging satellites has implications for surveillance and reconnaissance. The Cartosat series of satellites though designed for cartographic applications can be exploited to meet a part of the requirements of the Indian defence forces. But then there is no denying the point that Cartosat series of satellites fall short of the 10-15 cm resolution featured by the best of the defence satellites.

The launch of the 300-kg RISAT-II all weather microwave imaging satellite realized by ISRO in association with Israel Aerospace Industries (IAI) in April 2009 did give a new edge to the surveillance capabilities of the Indian defence forces. In fact, RISAT-II was built and launched on a fast track mode to meet the challenges posed by the growing terrorist threat to the country and heighten vigil along the Indo-Pakistan border. Equipped with a Synthetic Aperture Radar (SAR), RISAT-II is an all weather satellite capable of collecting data even under conditions of cloud, darkness, haze and dust. The fully home grown RISAT-1 satellite launched in April 2011 can easily complement the surveillance capabilities inherent in RISAT-II. The all weather microwave earth imaging satellites like RISAT-1 and RISAT-II would give early warning about any kind of troop build up and terrorist camps. Indian defence forces can access the remote sensing satellite capability built up by ISRO for meeting a part of their surveillance requirements, as remote sensing and surveillance are considered the two faces of the same coin.

The satellite intelligence capability is expected to provide Indian military planners, tactical and strategic information on military build up in China and Pakistan. The Hyderabad based Defence Electronics Research Laboratory (DLRL) of DRDO has hinted at developing an electronic intelligence satellite for the exclusive use of the Indian defence forces. This satellite would be capable to intercepting radar communications and satphone conversations of the adversaries .The glaring intelligence failure suffered by the Indian Army during 1999 Kargil skirmish with Pakistan has strengthened the urge of the Indian defence establishment to go in for space assets at an accelerated pace.

Clearly and apparently, the limited capability of ISRO in building and launching satellites could be a big hurdle in the way of helping the Indian defence establishment to meet their needs for “space assets”. Moreover, with the Indian industrial base lacking in resources and expertise to build satellites and launch vehicles on a turnkey basis, the Indian defence forces may find it difficult to get the kind of space platforms delivered into orbit well on time. However, a synergy between the technologies developed by ISRO and DRDO could prove a win win development for putting in place a platform for developing and launching a range of defence satellites. Indeed, in early 2010, DRDO had emphasized on a comprehensive Indian space defence capability on the strength of technological advances made by DRDO and ISRO. However, the road map for the building up of defence space capability of the country is far from clear. In particular, enough focus should be given to the institutional support mechanism for meeting the Indian defence forces’ rapidly growing needs of high performance defence satellites.

Of course, Indian industries continue to support the Indian space program by way of the supply of components and systems and hardware for satellites and launch vehicles. In sharp contrast, in US and West Europe, private industrial outfits have built up a technological and manufacturing base resurgent enough to supply both the satellites and launch vehicles in a ready to use condition. Against this backdrop, it may be appropriate to set up a high powered space defence agency authorized to pool the resources, expertise, talent and infrastructure available in the country-cutting across the private-public sector barriers for realizing the space based assets for the exclusive use of defence forces on a fast track mode with least bureaucratic interference.

The Indian Defence Ministry‘s “Technology Perspective and Capability Roadmap” till 2025 has identified space warfare as a priority area. The concept of integrated warfare and the need for reducing the “sensor to shooter loop” underpins the need for a totally radical approach focussed on “battlefield dynamics” with system capable of making available information on real time basis to all the three wings of the services. The roadmap of the Indian Defence Ministry identifies in unambiguous terms, the development of an anti satellite capability based on “electronics or physical destruction of satellites in both low and geostationary orbits.”

The launch of India’s first full fledged navigation satellite IRNSS-1A on July 2 is a development that could positively impact on the battlefield strategy of the Indian defence forces. IRNSS-1A, the first of the seven spacecraft constituting the space segment of the home-grown Indian Regional Navigation Satellite System (IRNSS), would provide the Indian defence forces a robust system for location identification and navigational support for combat aircraft as well as for combat platforms on land and sea. For the defence forces in the thick of the battle field operations, a GPS system like IRNSS enables locating objects in the dark and paves way for the coordination of the troop movements even in hitherto unfamiliar territory in addition to facilitating reconnaissance as well as search and rescue operations. For the Indian defence forces which had difficult times accessing the “restricted capability” of the US GPS system, IRNSS would provide hassle free, uninterrupted access to the satellite navigational capabilities.

Indeed the stunning effectiveness of the American GPS was demonstrated during the ‘Desert Storm’ operations of 1990-91 that was aimed at freeing Kuwait from the clutches of the invading forces from the neighbouring Iraq. Here the potentials of the American GPS was mainly pressed into service to guide bombers to targets, allow infantry and armoured units to locate their bases in frightening, featureless expanse of the desert and position artillery in a war zone ideally suited to fire at enemy lines apart from precisely navigating missiles to chosen targets. The US-led allied forces during their operations in both Afghanistan and Iraq relied heavily on satellite based navigation with hand held portable GPS devices to realize their strategic goals at a rapid pace.

By all means, GPS is considered a veritable force multiplier by the defence forces in the battlefield. Moreover, it has also been instrumental in shaping the contours of the precision warfare. For the Indian defence forces, the IRNSS system capabilities will be of immense use in refining the network centric warfare techniques. Similarly, the proposed Indian tri service aerospace command would need a large and independent satellite navigation capability that can be accessed anytime to boost its combat superiority. Indeed, for the Indian tri service aerospace command, access to GPS along with other satellites meant for communications, surveillance and weather watch would mean a quantum leap in meeting the challenges of the future warfare with confidence.

For India, there is an imminent need to develop a robust system to protect space assets that are critical to every aspect of military operations on the ground, in the air and on the sea. DRDO has hinted that it is working on putting in place the building blocks of an Indian anti satellite system to neutralize hostile satellites moving in low earth and polar orbits. The focus of DRDO would be on laser based sensors and exo atmospheric killer vehicle (EKV), the technology of which could be derived from its missile development programme. As it is, the technologies developed for India’s long range, nuke capable Agni-V missile which had its second successful test flight on Sept.16 could be profitably exploited for boosting India’s space defence and space warfare capabilities.

It was the early 2007 Chinese test that made use of a ground based medium range ballistic missile to smash an ageing weather watch satellite stationed at an altitude of 537-kms above the earth that sent shock waves through the Indian defence establishment. Subsequently, there was a strident clamour to develop a full fledged Indian space war capability along with a range of dedicated defence satellites. And the modest effort now on in this direction seems to be a response to Chinese strides in space defence capability. In realizing the military space capability, India should look beyond the Chinese threat by taking into account the global advances in the area of satellite technology and space warfare techniques.

INS Sindhurakshak Tragedy: Navy should Strengthen and Safeguard its Submarine Fleet

Radhakrishna Rao, 

Visiting Fellow, VIF

Even as the Indian Navy, the youngest of the three services, had every reason to rejoice over India’s home-grown nuclear powered submarine INS Arihant attaining criticality and the launch of the indigenous aircraft carrier INS Vikrant in the first fortnight of August, a massive blow in the form of the wrecking of the INS Sindurakshak submarine in a devastative explosion on August. 14, turned the” mood of celebration” into a “moment of sorrow and introspection”.

The death of eighteen Indian Navy personnel on-board the ill fated Sindhurakshak, considered the key, frontline conventional submarine in service with the Indian Navy, made the tragedy all the more painful and shocking. Evidently, Sindhurarkshak was a sort of prized possession for the Indian Navy as it had come back from Russia after an extensive refurbishment. Incidentally, Sindhurakshak was deployed at the Mumbai dockyard following a US alert about the possible LeT(Lashkar-e-Toiba) attack along India’s coastline.The 2,300-tonne Sindhurakshak was, by all means, the operationally best submarine at the command of the Indian Navy since it got new sensors and underwent structural modifications which extended its lifespan by almost a decade .Following its midlife refit programme at Russia’s Zvezdochka shipyard at an estimated cost of US$80-million, Sindhurakshak, originally built in 1997, was equipped with the tube launched Club-5 cruise missile effective against the surface vessels and submarines at a range of about 200-kms. Sindhurakshak is one of the ten kilo class submarines that India bought from Russia between 1986 and 2000.

In the aftermath of this tragedy, Defence Minister A K Antony informed the Indian Parliament that “The navy has ordered a Board of Inquiry (BoI) and it has started with all the seriousness. Its terms of reference are to look into all aspects of causes of this incident. Nothing is ruled out. All likely aspects would be examined by BoI” said Antony. In a way, Antony’s statement implies that sabotage angle could not be ruled out.

Antony also revealed that the entire operational submarine fleet of the Indian Navy is currently undergoing extensive checks on the weapons related safety system and an audit of the current standards operational procedure has also been ordered. But then a serious question that begs answer is as to why the political dispensation in New Delhi slept over for more than a decade over a proposal for the acquisition of the submarine rescue system. Naval warfare experts point out that the timely deployment of the state of the art Deep Submergence Rescue Vessel (DSRV) could easily save the lives of the sailors on-board the submarine under disintegration. Naval forces of Russia, USA, China, UK and Singapore all have deep sea rescue systems in place. It may be recalled that in August 2000, more than 100 Russian sailors on-board the nuclear powered submarine Kursk, which sank in the Barents Sea, had to pay with their lives on account of the failure to deploy DSRV on time. The moral of the story is that by deploying a submarine rescue system, India could have easily managed to save the lives of the sailors on-board Sindhurakshak.

And in what seems to be the case of bolting the stable after horses have left, just a week before the Sindhurakshak tragedy, an RFI (Request for Information) was issued for a “Submarine Rescue Bell System with LARS”(Launch and Recovery System). Whether it is the procurement of the much needed artillery systems for the Indian armed forces or the acquisition of submarines for the Indian Navy, dithering and delay reinforced by a “deadly indifference” seems to have become the order of the day. And the country and its defence forces ultimately pay a very high price for the painfully slow decision making process of the poorly motivated bureaucracy associated with the defence acquisition programme.

On the other hand, India as a country has not exactly covered itself with glory in so far as ensuring safety in all its manifestations is concerned. It is high time that the Indian Navy took steps to decongest its facilities at Mumbai and Vishakhapatnam. To begin with, quickening impetus should be given to the completion of the phase two of the “Sea Bird” project at INS Kadamba at Karwar in Karnataka to help relocate some of the ships and submarines from Mumbai. It is in the fitness of things that it has been decided to berth the retrofitted aircraft carrier INS Vikramaditya at Karwar naval base. In Vishakhapatnam, where the nuclear submarines are stationed, a refinery and a fertilizer plant are in close proximity to the naval facilities. What’s more, the harbour here with its narrow entrance can easily be blocked by sinking trawlers. As such, there is a need for a new green-field naval yard somewhere on the eastern coast. The principle that one cannot put all the eggs in one basket should be the guiding force of the Indian Navy.

Becoming wiser after the event seems to have become a norm rather than an exception for the Indian ruling elite. Antony has now directed for according a top most priority for sustaining the “operational efficiency” of the thirteen conventional diesel electric submarines left with the Indian Navy after the Sindhurakshak tragedy. Of course, an overwhelming majority of them are already into the evening of their lives .And only half of them will be available for deployment at a given time since the ageing submarine fleet is being forced to spend much of their time for repairs and maintenance. Further, Antony had made it clear that there should be no more delays in the construction of the six Scorpene submarines with the technology to be provided by the French firm DCNS. Antony has also asked for expediting the thirty year submarine building project which was approved by the Cabinet Committee on Security (CCS) way back in July 1999.

By all means, submarines constitute the sinew of under-sea warfare strategy for they play a key role in neutralizing hostile naval vessels and blockading enemy harbours by laying mine fields. And now it looks as if India’s under sea combat arm stands compromised. Indeed, a fact filled CAG (Comptroller and Auditor General) report tabled in the Indian Parliament in 2008 had raised the alarm bells by stating that due to “ageing fleet and prolonged refit schedules, the average operational availability of the Indian Navy submarine was as low as 45%”. The report had also pointed out that the “the availability of the submarines with the Indian Navy is much below the envisaged force level and a large number of submarines in the existing fleet have become due for decommissioning in the immediate future.” Indeed, the grim ground reality is that Indian Navy has not been in a position to boost its sub-sea patrol by acquiring new submarines after the year 2000.

To make the matter worse, Indian Navy is yet to acquire air independent propulsion (AIP) system driven submarines which can stay under-sea for longer periods in comparison to the conventional diesel electric submarines which are required to surface once in a few days for recharging their batteries. In the context of the expanding responsibilities being thrust upon it, the Indian Navy would need a minimum of 24 submarines to take care of the security on both the eastern and western coasts of the country. In comparison, China has about 60 submarines of which ten are nuclear powered. China is also into building ten more nuclear powered submarines.

Indeed, India’s ambitious plan for building six new generation conventional submarines under Project 75I stands behind schedule by three years due to the delay in decision making and finalizing the purchase of equipment to be fitted into the submarine including sensors and propulsion. As things stand now, the first of the six Scorpene submarines will be delivered only by 2015 with 2022 as the deadline for the delivery of the entire lot. Under Project 75I, two of the six submarines will be delivered in ready to use condition by the French firm DCNS. The DCNS will transfer the technology to India for building the remaining four submarines. The Indian part of the project will be executed by Mazagon Docks Ltd (MDL) in Mumbai and Hindustan Shipyard at Vishakhapatnam. These submarines will come equipped with the advanced AIP system. This project forms a part of the thirty year plan to boost the under- sea capability of the Indian Navy and strengthen the indigenous base for the design, development and production of the submarines. As part of the thirty year plan, it is envisaged that 24 new submarines will join the Indian naval fleet.

Currently, the only operational nuclear powered submarine at the command of the Indian Navy is INS Chakra which was launched in 2012. It was acquired on lease for a period of ten years from Russia. This Akula-II class “Nerpa” submarine has a maximum speed of 30 knots and can go to a depth of 600-metres.Chakra armed with four 533-mm and four 650-mm torpedo tubes is, by all means, a formidable undersea combat system .Of course, under the lease terms, Chakra cannot be equipped with nuclear weapons. But then Chakra would substantially strengthen the Indian Navy’s capability for power projection in the Indian Ocean region and beyond.

Indeed, India’s home grown nuclear powered submarine Arihant going critical on August 10 as a first step towards its extensive sea trials was a landmark event for the Indian Navy. Unlike the conventional diesel driven submarines, the 6,000-tonne Arihant will remain submerged in water for months on end, thus making its detection a really difficult task. Powered by a compact, indigenous Pressurised Water Reactor (PWR) capable of generating 83-MW of power, Arihant has catapulted India into the elite league of a handful of countries which have mastered the technological complexities involved in building a nuclear powered submarine. Incidentally, India happens to be the only nation in the IOR (Indian Ocean Region) to possess a nuclear powered submarine.

On its part, the Defence Research and Development Organisation (DRDO) is planning to induct BO-5 medium range nuclear missile into Arihant. It is also planned to equip Arihant with K-15 nuclear tipped missile which has a range of 700-km.Further into the future, Arihant can serve as a formidable platform for launching the under sea version of the Indo- Russian supersonic cruise missile BrahMos. Three more nuclear propelled submarines would be constructed under Indian Navy’ high profile Advanced Technology Vessel (ATV) programme.

Clearly and apparently, Arihant and its follow on submarines including Aridhaman will substantially strengthen India’s nuclear strike capability. In the context of India’s national policy of “no first use of nuclear weapons”, the submarine arm of the nuclear triad will provide India a “credible second strike capability” to inflict “unacceptable damage” on the adversary. By all means, the submarine based ballistic missiles are considered the most effective and difficult to detect nuclear weapons delivery system.

But then it would be sometime before India’s fully home grown nuclear powered submarines go operational and become a part of the under sea arm of the Indian Navy. As such, with a view to beef up the rapidly dwindling submarine capability of the Indian Navy in the immediate future, India is now negotiating with Russia for the lease of the another nuclear powered submarine. All said and done, ensuring the safety of submarines is as critical as acquiring and maintaining them. For not long back, a US navy lieutenant who chose to remain anonymous through his blogs had expressed his unhappiness over the poor empowerment of Indian Navy personnel in terms of enforcing safety measures at all levels in a professional manner. Evidently, the US Navy blogger is known to have spent a few days with an Indian Navy ship in the Arabian Sea under the exchange programme.

Because the entire submarine fleet with the Indian Navy is both old and obsolete, the problems associated with ensuring their safety are too many and complex. For example, the fighting equipments past their designed life span are prone to mishaps and accidents. And the delay in procurement of new systems to replace the older ones only adds to the problem of ensuring safety. As is the case with the proposals for the procurement of battlefield hardware for the Indian Army and the Indian Air Force (IAF), the plan for the acquisition of submarines for the Indian Navy has been hanging fire for many years now. Unless our defence bureaucracy develops a vision and motivation for fast tracking the battlefield hardware in a time bound, transparent and cost effective manner, accidents like the Sindhurakshak tragedy is bound to repeat time and again. It may be recalled that the diesel electric driven submarine INS Sindhughosh had run into collision with a fishing boat in 2006 followed by a merchant vessel in 2007.

India should also probe thoroughly the observation of the Russian side that the violations of safety regulations could be the most likely cause of the explosion that wrecked Sindhurakshak. But here again, it would also be appropriate for the Indian Navy to evaluate the quality of Russian workmanship as well as the integrity of the systems and weapons forming part of the submarine. Of course, Indian Navy has in place well formulated and time tested procedures for ensuring the safety of submarines. But then to what extent they are implemented with all the seriousness they deserve, no one is sure as yet. And in particular this angle should be probed in depth.

For the navy personnel, living and operating in an undersea environment of the submarine, makes for a demanding and unforgiving task, for they lead a check by jowl existence with a bank of chemical batteries requiring periodic charging, inflammatory and dangerous gases as well as highly explosive warheads. This implies that even a small “mistake or lapse” could be dangerous and could cause a huge explosion leading to a certain catastrophe. Especially, while working in a submarine acquired from overseas source, the Indian Navy sailors should display a greater level of circumspection and caution as there are many “grey areas” in the safety measures and principles devised for them. There is no denying the fact that only a home grown system could ensure a greater level of safety and security in comparison to imported hardware. For here Indian naval personnel could have access to the entire range of data—starting from design phase to the level of integration and final assembly. In case of doubt, they can always go back to the original source. And this advantage would not be available with an imported system. This is one more major argument that goes to boost the case of indigenization from the word go.

Coming to the Sindhurakshak tragedy, greater stress should be placed on the safety of the propulsion system of a submarine. For it is speculated that the failure of the safety system related to the propulsion module of Sindhurakshak was responsible for the explosion. Because the diesel electric powered submarines are run on chemical batteries requiring occasional charging, the chances of their being subjected to explosion cannot be ruled out. By going in for the air independent propulsion system, the chances of submarine accidents could be minimized. All said and done, the argument of Uday Bhaskar, former Director of the National Maritime Foundation that “the zero error safety tenet will have to be reemphasized and internalized” should be the guiding principle of the safety procedures being implemented for the Indian submarine fleet. In the ultimate analysis, the security aspects of the mechanism of man machine interface should receive utmost priority to obviate the Sindhurakshak type tragedy. Under no circumstance should the safety principles be compromised. And the Indian Navy should lose no time in insulating its submarine fleet from “mishaps and accidents” by implementing safety rules and regulations at every stage of the operation.

Fiscal Pressures and Defence Budget: 2012-13

Vinod Anand 

(Senior Fellow, VIF)

The Finance Minister, Mr. P Chidambaram has begun a major exercise to rein in the burgeoning fiscal deficit which is likely to rise to 6 percent of GDP. The stated objective is to bring down the deficit to a level of 5.3 percent of the GDP as many financial and economic experts have recommended that maintaining a deficit of around 5 percent would be a prudent step looking at the current state of economy. This would prevent erosion of country’s fiscal credibility which has been somewhat under attack by credit rating agencies. Though plans have been proposed to reduce the government’s expenditure and obtaining funds from disinvestment, sale of spectrum and other assets and asking for special and enhanced dividends from Public Sector Enterprises, yet these measures may not be adequate to restrict the fiscal deficit to the targeted figure of around 5 percent.

In October, the Finance Ministry called for a reduction of non-plan expenditure by 10 percent which in effect means that over all savings, through this step, could amount to Rs. 75,000 crores. Though, it is not clear as to whether reduction of defence expenditure is part of this step yet, it is well known that generally the Ministry of Defence has not been quite up to the mark when it comes to spending the allotted funds especially from the capital account (meant for modernisation programmes) in time.

At the time of presentation of defence budget for financial year 2011-12 in February, 2011 it was claimed that funds allotted have been fully spent and this was as a result of a number of steps taken by the Ministry of Defence (MOD) to fast track the procurement process. However, while presenting the Revised Estimates (RE) for 2011-12, it came to light that from Army’s capital budget an amount of Rs. 3055 crores had been surrendered; Navy was allowed to spend more than its allotted budget by Rs. 2801 crores otherwise the amount of under-spending would have been higher. Total surrender of funds by the MOD which included those by the Air Force amounted to Rs. 5727 crores. This only indicates that despite frequent revision of Defence Procurement procedures the lingering problem of delays in acquisitions has not been entirely solved and the expenditure inefficiencies persist.

The problems of defence modernisation are further compounded by what is projected by the Services/MOD and what is finally allotted because of the budgetary constraints. The tables given below indicate the requirements projected and the funds allotted.

Projected requirement for Capital Modernisation Budget 2012-13 (In Crores of Rupees)




Capital Modernisation Budget 2012-13 (In Crores of Rupees)

As can be observed from the above figures there is a complete mismatch between what is projected and what is allotted. In fact, during the entire plan period of Eleventh Five Year Defence Plan (2007-2012) each of the services has got allocations that are less than the projections during each of the year. Further, the committed liabilities cannot be changed and therefore the axe falls on the capital budget for new schemes. The problem is more acute in case of the Army where DGOF Supplies has taken away large chunk of the capital modernisation budget of 2012-13. All this has been questioned by the Parliament’s Standing Committee for Defence (SCD); MOD representative in his reply obfuscated the issue by a giving a stock reply that Ministry of Finance would be approached for further funds. The SCD has expressed grave concern on the meager outlay for the new programmes. The Committee has also stressed that not only the committed liabilities should be taken care of but additional allocations should also be made to cover the huge gaps between the required and existing capabilities. There are deficiencies in force levels, armaments, munitions, aircraft and so on.

With the MOF’s continuing its efforts in restricting the fiscal deficit it might come about that defence budget for 2012-13 (Rs 193407.29 Crores) may be negatively impacted. Some estimates indicate that the allocations may be reduced by upto five percent or an amount of Rs. 5500 crores to about Rs. 10,000 crores. Since the scope for reducing the revenue budget is limited the capital budget would become target for major reductions. Further, it is the new schemes that will suffer rather than the past contractual obligations.

The critical hollowness as brought out by the present and previous Army Chiefs had moved the government to place orders for acquisition of missiles and ammunition for tanks and infantry combat vehicles. The IAF has also ordered for 200 Brahmos cruise missiles; apparently all such acquisitions might have to be met through better accounting/management between the revenue and capital account. But, the new programmes in the capital account are likely to suffer thus putting paid the plans for ushering in RMA at a faster pace in the Indian Armed Forces. As it is, the proposal for raising a Mountain Strike Corps has been sent back to the Chiefs of Staff Committee for a relook thus relieving the Finance Ministry from making any allocations for the same if it were to be raised in the current fiscal year. The Army’s plans for acquiring heavy and medium vehicles, artillery guns, air defence systems, communications equipment would also suffer a setback. The Army’s budget being over 50 percent of the defence budget is likely to be impacted the most. The Air Force and Navy programmes would fare no better. If the economic situation deteriorates further then there is a likelihood of large committed liabilities of the technology intensive IAF and Indian Navy being deferred which may again add to delays.

The economic growth has been showing a downward momentum and various estimates indicate that this year the growth would be less than 6 percent of the GDP (somewhat closer to 5 percent). The Prime Minister, addressing the Combined Commanders Conference some years back had promised to enhance the defence budget to 3 percent of the GDP if Indian economy continued to grow at 8 percent of the GDP. But that may not come about for some time. For last two years the defence budget has been less than 2 percent of the GDP which has prevented the acceleration of modernisation of the armed forces. Further, in the coming elections season the problems may be compounded by the need of the government to divert funds for development sector or other programmes which would have bearing on the forthcoming elections in 2014.

While there is a need for the armed forces to streamline its revenue expenditure it also needs to rectify its expenditure inefficiencies for which the MOD has been criticized many times. As underlined earlier, though Defence Procurement Procedures have been modified several times yet the same has not helped in removing the inefficiencies in procurement. If the MOD is unable to spend 2/3rd of the funds by end December then there is a great scope for reducing its allocations in the Revised Estimates stage for the current fiscal. There are indications that this level of expenditure may not be achieved by then.

Meanwhile, China and Pakistan have been adding to their arsenal and have vastly improved their strategic posture at the borders. The SCD in its report for 2012-2013 demands for grants has emphasised on ‘the urgent need for to build the Defence capabilities to face any of the challenges including the worst scenario of two front war. As such the Committee strongly recommends that the requisite allocations should be made available to the Ministry of Defence for their different programmes. Besides, the Ministry of Defence on their part should also build capacities to utilize the allocated resources.”

Thus, the modernisation programme of Indian Armed Forces needs to be kept on track. The Finance Minister should be looking largely at the other ministries and departments and other innovative ways to shore up government’s finances as the military has been, for many years, allotted funds which are much less than what is required.