India's defense budget for 2013-14 has been pegged at around $40 billion. This is a modest increase of 5 percent, compared to 17 percent from the year before.

Within the Indian context, it means that India's defense expenditure for 2013-14 will be at the lowest point in three decades. This should be enough only to meet the expenditure on account of pay and allowances and maintenance of the weapons systems. 

What does this mean for India's defense readiness? How has the Indian Ministry of Defense (MoD) responded to this? Well, the MoD doesn't seem to be overly bothered about it.

Sample the on-record reaction of Indian Defense Minister A.K. Antony: "Taking into account the difficult economic situation both at home and abroad, the Finance Minister has done a good job. The measures that he has outlined for the rejuvenation of the economy while ensuring inclusive growth are indeed commendable. Factoring the current economic scenario, he has been fair to the Defense Sector also by increasing the budget and assuring that should there be any urgent need in future the same would be provided." 

But is it really so? This will have a cascading effect on the Indian defense modernization program. The most immediate effect will be that the Indian armed forces will not be able to get big-ticket acquisitions. 

The Indian boat has already been rocked by numerous allegations of kickbacks. Worse, the MoD has already announced a cut to its acquisitions budget. Therefore, the Indian armed forces would be able to acquire only a few of its urgently required items. 

This would definitely slam the brakes on India's defense modernization program that had been aiming high after the defense budget of last year (2012-13) which was pegged at $38 billion, an impressive increase of 17 percent year-on-year. 

The Indian armed forces, army, navy and air force all included, have a long shopping list and have been pushing for an urgent modernization drive. The MoD has given the green light to a large number of capital intensive muscle-building projects and purchase of armaments from foreign vendors. 

However, the Ministry of Finance has halted this drive due to the financial crunch. One of the important army projects stalled in the ministry corridors is China-specific. The army wants to raise two more strike corps at the Line of Actual Control with China on the northeastern border. 

The case of the Indian Navy is even queerer. A couple of months back, navy chief Admiral D.K. Joshi had said that the navy was prepared to meet any challenge in the South China Sea. 

One expected a sizable increase in the navy's budget against this backdrop. On the contrary, navy's budget has actually been decreased from last year's $2.28 billion to $2.22 billion this year. 

If seen in the context of the tumbling Indian rupee, India's defense expenditure remains virtually stagnant. Moreover, in terms of the GDP ratio also the just announced defense budget comprises only 1.79 percent as compared to 1.90 percent last year. 

However, the ruling coalition has its own compulsions, largely political. The government does not find it politically prudent to raise the defense expenditure and consciously decided to ignore the recommendation of the parliamentary standing committee on defense to peg the defense budget to between 2.5 percent and 3 percent of the GDP. 

This is because the next general elections are due by May 2014 and the possibility of holding elections a few months ahead of schedule cannot be ruled out. The government needs funds to push big ticket schemes in the social sector in this election year. 

The votaries of development-oriented politics would be happy. It is time to think of the hungry man on the street and push for inclusive growth. Finance Minister P. Chidambaram did not have too many options in his quiver.



The author is a New Delhi-based journalist-author and a strategic affairs analyst. bhootnath004@yahoo.com