To reduce revenue expenditure, look at civilians paid from Defence Estimates, not Services’s non-combat manpower
Cutting nose to spite face
Friday, 27 May 2016 | Deepak Sinha
The Minister for Defence has recently announced the formation of an 11-member committee, led by Lieutenant General DB Shekatkar (Retd), to look into areas of overlap and convergence within the three Forces — the Indian Army, Navy and Air Force. The committee will also identify areas to “rationalise manpower”, examine possible areas of multi-tasking by troops and suggest ways to “optimise” combat potential by bringing in more technology instead of more boots.
This is to ensure that the burgeoning revenue expenditure, the monies spent on pay, allowances and pensions among other things, is brought under control so that more funds are available for capital expenditure, especially acquisition of modern weapon systems. As Bhartendu Kumar Singh of the Indian Defence Accounts Service points out, “The Accounts Branch of the Indian Air Force, for example, has 492 commissioned officers and 7,000 men catering to the pay matters of 1,60,000 officers and men in the Air Force. On a competitive note, the same can be provided by 300 people on the civilian side very easily.”
There can be no two opinions that such a detailed examination is necessary and must be undertaken periodically, except to suggest that the period of three months given to the Committee to complete its task seems grossly insufficient, if it is to do justice to this critical issue. In fact, one may even suggest that by restricting this examination only to the military, the Defence Minister has not gone far enough. The reasons for this are not far to seek. The MOD, for example, has sanctioned posts of 5, 85,000 civilians, which is more than the active strength of the Pakistan Army. The MOD spends more than Rs1,000 crore annually on pay, allowances and establishment of the Ministry of Finance personnel who are attached to it. The civilian-manned Military Engineering Services spends nearly double the amount of the work it does on its own establishment costs. The Defence Research and Development Organisation only utilises 39 per cent of its budget on research and development while the remainder is spent on establishment costs.
The burgeoning pension bill, which is expected to touch Rs60,000 crore this year after taking into account the sanctioning of One-Rank-One-Pension, is another problem. While reduction of manpower will certainly go some way in controlling this issue, the fact is that the per capita expenditure on 25 lakh military veterans and their kin amounts to approximately Rs1.5 lakh annually, while the four lakh civilians paid from the defence pension budget receive an average of Rs5.38 lakh a year, which will shoot up astronomically as and when the Seventh Pay Commission report is implemented.
These examples show that priority needs to be given to reducing civilian manpower paid from Defence Estimates, before reducing non-combat manpower of the Services. The fact is that civilian pensions, despite catering to one-fifth the number of military pensioners, make for approximately 36 per cent of defence pensions — and given our difficulties in ensuring employment, even populism suggests it is better to reduce civilians who cost five times more than to reduce the military.
On the question capital expenditure being given pride of place in our defence budget to ensure our Forces are adequately equipped, the fact is that this issue is much more than just adequate budgeting. Between eight to 13 per cent of the funds marked for capital expenditure remains unutilised. For 2015-16, this was as high as 13.4 per cent, amounting to returning Rs11,505 crore. This should count as criminal negligence, given the poor state of our weapons and equipment, on the part of those within the military responsible for procurement.
And this is where the issue gets complicated. The Government always shows its ‘firm commitment’ to national security by allotting adequate funds to the MoD but then manipulates the budget to cater to unforeseen situations. The Finance Minister cannot touch revenue allotments as those are fully committed but, with the active connivance of the MoD (Finance), he takes full advantage of the capital allotment to meet unexpected expenses. All bureaucratic measures are put to good use to delay or derail the procurement process, resulting in vast amounts remaining unspent.
Defence Minister Manohar Parrikar is known for his intelligence and clarity of thought but like one of his earlier predecessors, Krishna Menon, he too may find his reputation dented somewhat, if he looks at issues through blinkers and acts in haste. It makes little sense to cut off your nose to spite your face. To start with, instead of setting up new committees, he will do well to implement the report of the Naresh Chandra Committee and the recommendations of the Group of Ministers of AB Vajpayee Government.
(The writer is a military veteran and consultant with the Observer Research Foundation)
Read at: Daily Pioneer