Page 56 - The Indian EYE 081922

The Indian Eye
OPINION AUGUST 19, 2022 56

Umbrella programmes and schemes. expenditure is concerned. self-serving assumptions about what defense production.
This process would be carried for- These micro-level ‘reforms’ can- the defense outlay ought to be. There is some merit in explor-
ward in the coming years”. not, however, yield the desired results A lot of energy has been frit- ing these options but there is no say-
But there was no follow-up of without an enabling broad frame- tered away over the years in pursuit ing how much money can be saved
the process, at least not in relation to work and hard-nosed guidelines for of fruitless or impractical ideas like through these means, and more
the defense budget. On the contrary, defense budgeting. This macro-level pegging the defense budget at 3 per importantly, whether the money so
the limited practice of factorizing the reform would require the MoD, and cent of the GDP, creation of a non- saved will be good enough to exorcise
Indian Navy’s capital budget into sev- more particularly the armed forces, lapsable pool of funds for moderniza- the Twainian evil of paucity of funds.
eral outcome-oriented budget heads to be more pragmatic, by aligning the tion and taking defense pensions out According to the Fifteenth Finance
also seems to have been abandoned process of budget formulation with of the ambit of defense budget. Some Commission’s report, the defense
in the last two–three years. To illus- the fiscal reality. It means that the half-hearted attempts have also been outlay for the next three financial
trate, in the DG for Capital Out- annual budgetary projections must made at containing the expenditure years is likely to fall short of the re-
lay on Defense Services for the FY conform to the likely availability through outsourcing, manpower ra- quirement by Rs 9,87,470 crore, of
2018–19, allocation made for several of funds and not be based on some tionalization, and indigenization of which Rs 5,27,491 crore will be under
projects was indicated separately. the capital segment that caters for
In the said budget, specific allo- the expenditure on modernization.
cations were made for Project 1135 This gap cannot be bridged by any re-
(Talwar class frigates), Project Var- alistic hike in the defense budget or
sha, Air Defense Ships, VLF Project, through the proposed Defense Mod-
Naval Academy Ezhimalai Project, ernization Fund of Rs 1,38,354 crore.
Missile Technical Positions, Project Financially viable defense plan-
Sea Bird Phase IIA, Construction of ning is required based on zero-based
protective retaining Bund/Dry Dock, budgeting approach to estimate bud-
etc. At least in theory, this made it getary requirements. This will cut
possible for the MoD to assess the wasteful expenditure and compel the
outcome of the allocation made for planners to look at more efficient
these projects at the end of the year ways of spending money, monitoring
with reference to the targets set for the expenditure, evaluating the out-
that year. comes, and taking corrective action.
Instead of extending this prac- Sadly, this has not been the case with
tice to other areas of defense expen- defense planning so far.
diture which lend themselves to out-
come-oriented monitoring, even the Amit Cowshish is a former Financial
above-mentioned budget sub-heads Advisor (Acquisition), Ministry of De-
entirely vanished from the DG for fense and former Consultant, Manohar
the FY 2019–20. Parrikar Institute for Defense Studies
This outcome-oriented approach and Analyses, New Delhi
to structuring of the defense budget Views expressed are of the author and
needs to be adopted in relation to do not necessarily reflect the views of
every segment of the defense bud- the Manohar Parrikar IDSA or of the
get which lends itself to evaluation Government of India.
of outcomes, such as the allocation
made for capital acquisitions. Adop- This is the abridged version of the Intro-
tion of this approach will require duction of the book which appeared first
a relook at the existing scheme of in the Comment section of the website
budget heads which is outdated and (www.idsa.in) of Manohar Parrikar In-
serves little purpose in so far proper stitute for Defense Studies and Analyses,
outcome-oriented classification of New Delhi on August 3, 2022

www.TheIndianEYE.com