Buy within the budget: the new prioritisation mantra
Why the navy won't get a third aircraft carrier and the air force fleet of 100 imported fighter jets might run into difficulties in the era of depressed military budgets
By Sandeep Unnithan
New Delhi, February 7, 2020, 12:43 IST
Chief of Defence Staff General Bipin Rawat speaks during the Raisina Dialogue 2020, in New Delhi, Thursday, Jan. 16, 2020. (Photo by Pankaj Nangia/Mail Today)
India's armed forces have thus far trained and planned to fight wars as single services. This included buying their own military hardware and resisting attempts to share or pool resources. That is set to change with the government having appointed its first Chief of Defence Staff, General Bipin Rawat, on January 1 this year. A key result area for the new CDS will be jointmanship -- to ensure the services train, equip and procure hardware jointly. In his first detailed media interaction on February 4, over a month after taking over, General Rawat outlined his tasks over his three-year tenure. His goals range from creating integrated 'theatre commands' and pooling military resources down to the level of creating a common motor transport pool in the national capital (currently, each service has its own).
Another of General Rawat's key responsibilities is to 'assign inter-services prioritisation to capital acquisition proposals based on the anticipated budget'. In other words, prune armed forces' requirements according to the budget. This means every major single-service buy will be closely scrutinised. High-profile projects, like the navy's requirement for a third aircraft carrier, are likely to go under the axe. The IAF's plan to locally build 110 fighter aircraft might also run into approval issues. Feathers, quite clearly, are going to be ruffled in the air and naval headquarters.
The key decision-maker is nonplussed. For General Rawat, the navy's Indigenous Aircraft Carrier-2 (IAC-2) project, a 65,000-tonne, conventionally-powered aircraft carrier, with approximately 55 fixed and rotary wing aircraft, doesn't make sense. He feels it will divert scarce budgetary resources away from the two other services. "You have to look at priorities," he says. "It's a major investment. What is it that the navy themselves will not be able to get (if they push for IAC-2) and what will be the effect on the army? You cannot just have one service moving ahead."
"It's not just an aircraft carrier, it is 2,500 crewmen, their salaries the air element and their screens (destroyer escorts) and logistics," he added.
General Rawat perhaps knows how single-service raisings can wreck budgets. The army raised only two divisions out of a planned three-division Mountain Strike Corps with 90,000 soldiers, approved in 2013. The Rs 60,000 crore bill for the formation with 90,000 soldiers gutted the army's revenue budget.
The navy currently operates the INS Vikramaditya, a refurbished Soviet-era aircraft carrier acquired from Russia in 2013, with a second carrier, the indigenously built Vikrant, set to join sometime next year. The navy says it needs a third aircraft carrier to ensure two are always available for service when one carrier is being refitted.
As General Rawat hinted, the navy already knows what it will not get if it pushes for a third carrier--a fleet of six nuclear-powered attack submarines (SSNs). The navy's case for building six indigenously built SSNs, at a total project cost of Rs 96,000 crore, is pending for approval by the Cabinet Committee on Security. This is also roughly what the IAC-3 with its air wing will cost. And herein lies the navy's dilemma. The government independently funds the fleet of four Arihant class nuclear-powered ballistic missile submarines (SSBNs). Funds for the SSNs, however, will come out of the naval budget over the project's 15 -year build time. Top navy officials admit they will not be able to fund both the SSN and the IAC-3 without a budget hike. This isn't happening because the navy's share of the defence budget is actually falling, from 18 per cent in 2014 to just 15 per cent this year.
General Rawat was more circumspect about the IAF's 110 fighter aircraft buy, estimated to cost over $ 15 billion (Rs 1 lakh crore). Six global firms responded to the IAF's Request for Information (RFI) in 2018 and the aircraft will be built by a foreign OEM (original equipment manufacturer) in 'Strategic Partnership' with an Indian industry partner.
"My personal belief is, don't buy 100 aircraft or any other equipment in one go. If you buy 100 aircraft in one go, all 100 will be due for servicing at the same time," he says. He instead suggested staggering the buys over several years to allow the budget to pay for it.
This, IAF officials say, is bizarre. Buying larger numbers actually makes economic sense because it leads to economy of scales for indigenous manufacture. Deliveries are staggered over several years. The IAF is soon to ink a contract for four squadrons of 83 indigenous LCA Tejas Mark-1A worth Rs 40,000 crore. But the service is down to just 28 fighter squadrons against a government sanction of 42 squadrons. Hence, it needs more jets over and above the LCA order.
General Rawat's media interaction came three days after the defence budget showed a modest 9 per cent increase and, alarmingly, the defence pension bill outstripped funds for buying defence hardware. The modest hike means the armed forces will have little money left to buy new hardware after paying annual instalments for past purchases. The government wants to reduce the armed forces' dependence on costly imports and boost its Make in India mission to indigenously manufacture defence hardware.
"Budget (shortfalls) are more of a management issue than a funds issue," General Rawat said as he explained how the army overcame its resource crunch by prioritising weapon and ammunition buys over a gigantic project to build residential housing for soldiers. The prioritisation mantra, it seems, is here to stay, whether the services like it or not.
Buy within the budget: the new prioritisation mantra
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