The Indian Union Budget is announced every year on February 28, just before the Ides of March. The Ides of March refers to the 15th day of many months including March which was dedicated to ‘Mars’ —the Roman God of War and celebrated as a military parade. Mars is also considered as a guardian of agriculture. The earlier slogan of ‘Jai Jawan, Jai Kisan’ has been replaced by the current Finance Minister P. Chidambaram by ‘Jai, Youth, Woman and the Poor’. Only time will tell whether the defence budget 2013-14 will salute the military or there will be more slippages in modernisation, especially for the Army.

Facts and Figures

Now for some number crunching. The share of defence in the budget is 2,03,672.12 crore (about $37.03 billion), which gives a symbolic hike of about five per cent but actually does not cover the inflation. Compared to the GDP, it is 1.79 per cent of it, way off the defence forces wishlist of three per cent. The revised estimate for 2012-13 was 1,78,503.39 crore (about $32.46 billion). Thus compared to it, the hike is 14 per cent, but this could be an illusion as the revised estimate of 2013-14 will be announced later when the actual hike will be known. There was also a cut in the budget of 2012-13 by 10,000 crore from the capital budget and 4,904 crore from the revenue budget, amounting to a total cut of 14,904 crore (about $2.71 billion). The revenue budget for the Army is 81,833.93 crore, Navy 12,194.43 crore, Air Force 18,295.10 crore, the Defence Research and Development Organisation (DRDO) 5,552.57 crore and for the ordnance factories it is 944.62 crore. There are two more takers in the revenue head i.e. the Ministry of Defence (MoD) 5,173.79 crore and for the pensions, the allotment is 44,475.95 crore. The capital expenditure which is meant for modernisation is pegged at 86,740.71 (about $15.77 billion).

Capital Budget

Capital budget has been allotted under many heads like land, construction, naval fleet, naval dockyards, ordnance factories, DRDO, Rashtriya Rifles, etc. There is also an interesting subhead named ‘Prototype development under make procedure’. The total capital budget is 86,740.71 (about $15.77 billion). Out of this, the allocation under key heads for the Army, Navy and Air Force is as follows. All figures below are in crores and rupees, and the figures in the brackets indicate the revised estimates in 2012-13.

Aircraft and aero engines

Heavy and medium vehicles

Other equipment

The ordnance factories have been allotted 433.96 ( 399.96) crore and DRDO 5,057.60 (4,640.0) crore.

Army

The Army has been allotted a total of 13,311.02 crore (about $2.4 billion) for modernisation under various heads. The important schemes which take priority are raising and equipping the strike corps for the North-eastern sector, acquiring 155mm guns in their various versions, modernisation of Army Air Defence which has been languishing for almost three decades and replacing the ageing light utility helicopter fleet of the Army Aviation Corps. The mountain strike corps may cost as much as 60,000 crore to 80,000 crore spread over the Twelfth Five Year Plan from 2012-17. The Artillery urgently requires about 1,500 howitzers of 155mm calibre. Twenty-six years have passed since the last induction of the versatile 155mm Bofors howitzer. The process has been started, terminated and restarted many times but some hurdles have always come in the way. India also needs 145 ultra light howitzers for the mountains and about 300 tracked and wheeled guns for the armoured and artillery divisions which are expected to cost about 20,000 crore. In 2003, India issued a request for proposal (RFP) for 197 light helicopters worth between $500- million and $600 million to buy 60 helicopters outright, with the remaining 137 being built under licence by the Hindustan Aeronautics Limited (HAL). This RFP was withdrawn just before it was to be signed. Since then the requirement for light utility helicopters has been kept under suspended animation and one is not sure as to when it will be finalised. The revenue budget caters to the operative cost of the Army and the current figures indicate that they are not adequate for making up voids of ammunition and missiles which have slipped out of control due to neglect over a period of time although 14,709.26 crore (about $2.6 billion), have been allotted under stores and is a marginal increase from last year’s revised estimates of 13,197.74 crore.

Air Force

The Indian Air Force (IAF) is likely to maintain a 34 squadron strength during the Twelfth Five Year Plan which may finally reach 42 squadrons by the Fourteenth Five Year-Plan. The most awaited is the finalisation of the medium multi-role combat aircraft (MMRCA) contract with France and funds have been catered for the initial payments as 25,539.59 crore (about $4.6 billion) have been allotted to the IAF under the head of aircraft and aero engines. Other likely inductions are Su-30, CH-47 Chinook heavy-lift helicopter, AH-64 Apache attack helicopter, MI-17V5, light utility helicopters, and PC-7 Pilatus amongst others. The fate of the Augusta AW101 helicopters meant for VIPs is in the doldrums, thus its future is not known.

Indian Navy

Indian Navy has been allotted 8,965.37 crore (about $1.63 billion) under various heads as compared to last year’s figure 4,968.13 crore (about $0.9 billion); almost a double jump. In addition, the Naval Fleet has been allotted 11,772.26 crore (about $2.14 billion) as compared to last year’s figure of 11,012.90 crore (about $2 billion), which is a marginal increase. This amount is used for acquiring new ships and for paying of pending liabilities under capital acquisitions. The Naval Dockyards have been allotted 2,011.17 crore (about $0.36 billion) as compared to last year’s allotment of 771 crore (about $0.14 billion), thus a 2.5 times increase. This is meant for building up of infrastructure for the dockyards. The likely inductions which may require initial/part/final are:

• Aircraft carrier INS Vikramaditya: It has had unprecedented delay and cost escalations. The Indian Navy crew are already in Russia for the final taking over and training and its likely induction is by the end of 2013 as understood from the flying visit of Putin during December 2012.
• P-8I: India has received the first P-8I maritime surveillance aircraft from Boeing in the US. The aircraft will be used for training the Indian Navy crew. It is understood that two more are likely to be handed over in 2013. A total of eight Boeing P-8I Poseidon maritime reconnaissance aircraft have been contracted for. The Indian Navy is expected to contract for four more P-8Is during 2013 once deliveries begin.
• RFP for P75-I: The Indian Navy is likely to issue the RFP to procure six submarines with air independent propulsion capability under the P-751 project which is worth over $10 billion. The Defence Acquisition Committee had already cleared the proposal. However, considering the pace of acquisition, it is unlikely that RFP will fructify into selection and signing the deal in the near future.
• MiG-29K: Indian Navy has received the delivery of four MiG-29K Fulcrum-D carrier-based fighter jets from Russian aircraft manufacturer MiG under a $1.5-billion contract for the supply of 29 additional MiG-29K/KUB ship-borne fighters. More are expected this year.
• Upgraded Indian Navy submarine starts seas trials in Russia: An Indian Navy Kilo class diesel-electric submarine INS Sindhurakshak has been overhauled at the Zvezdochka shipyard in northern Russia. After necessary sea trials, it is likely to be handed over during early 2013. The Indian Navy holds ten of these submarines, out of which four have been overhauled and delivered.
• INS Tarkand: Indian Navy had placed an order from Yantar Shipyard in Kaliningrad, Russia, for three Talwar class frigates. INS Teg and Tarkash have been handed over and the third INS Tarkand is to be handed over during the summer of 2013.