Maj Gen Rajan Kochhar (retd.) speaks with Col Anil Bhat (retd.) on India's defence budget | SAM Conversation
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00:00Welcome to SRAM Conversation, a program of South Asia Monitor.
00:12Our subject today is allocation for defence in the 2025 budget announced yesterday by
00:23the Finance Minister, Ms. Nirmala Sitharaman.
00:28At every budget, there is a lot of expectation about how much the allocation for defence
00:38is going to be, but it appears that over all these years, there is not much of a difference
00:45in the pattern.
00:46If the allocation this time is Rs. 6,81,210.27 crore, it amounts to about a 4.65% increase
01:01in capital allocation, a 9.29% increase in pensions, and a 10.47% increase in expenditure
01:15on civil.
01:18This is not really a jump at all.
01:21It's not an increase at all, because inflation takes care of, you know, inflation negates,
01:29it neutralizes such an increase.
01:31The aim of the army for 24 was technology absorption, and for this year, it is the year
01:42of defence reforms, very, very urgently required reforms.
01:48In modernization, we need field guns for the artillery, 68% of them are vintage, 22% of
02:02them are current, and just 8% of them are state of art.
02:10In technology, we need to focus on artificial intelligence, quantum computing, machine learning,
02:19robotics, hypersonic, cyber, and space capabilities.
02:24Development organization output is not enough.
02:30We need the private sector and academia, replacement of aging equipment is another area we need
02:38to address very urgently.
02:45In particular, there are equipments like the Vajra K-9 self-propelled gun, the ATAGS howitzer,
02:55the futuristic infantry combat vehicle, the government public sector output is not enough.
03:04The private industry must be tapped.
03:07And today, the private industry has acquired quite a capability to produce the kind of
03:19equipment that we need.
03:22And the border roads, ever since 2007-2008, when then Prime Minister Manmohan Singh was
03:41very worried about how much progress China had made and how little progress we had made,
03:52and he promised a fast-track development package for Arunachal Pradesh.
03:58Since then, we've built about 100 roads, bridges, and tunnels, 75 of which were inaugurated
04:09by the Defense Minister quite recently.
04:14But they need much more than the 6,500 crore.
04:21They need about 10,000 crore because there's still more to be made.
04:27There are more bridges, roads, and tunnels that are required not only in the border that
04:36we have with the Chinese, the Line of Actual Control, but with Pakistan and also in the
04:41island territories.
04:44Without delving any more, I will request VG General Rajan Kocha, it's a pleasure to have
04:53you with us.
04:54Please update us on whatever needs to be done.
04:58Good evening, sir, and Jai Hind to all your viewers.
05:08And at the outset, I wish to thank you for inviting me over for this very important discussion,
05:15especially within 24 hours of the presentation of the defense or the union budget.
05:23As a nation, we all are concerned for the security of the country.
05:29And that is why this budget is allocated to the Ministry of Defense on a yearly basis.
05:38Only the government is aware of the threat of perceptions which we have today.
05:42And to negate these threats, we have to learn the capabilities.
05:49You have rightly said that the budget over the years has not given us as far as the defense
05:58is concerned, much to cheer about.
06:01The reason is that we have a large percentage of vintage equipment in the armed forces,
06:09a small percentage of state of art.
06:12So if you have to graduate from vintage to state of art, what is our roadmap?
06:20How many years we want this state of art of 8 to 10% to remain where it is and progress
06:29to at least 25%?
06:35Have our budget planners taken this roadmap into account?
06:41Because if you take this roadmap into account, and if you visualize that you will take around
06:525 to 10 years to reach this statistics of 25%, then unfortunately, this kind of a budget
07:01does not give you much to cheer about.
07:05The reason is, let us analyze first the capital part of the budget.
07:14Now this capital budget last year was 6.21 lakh crores at the time of the budgetary estimate.
07:28When the revised estimates came, it became 6.41 lakh crores.
07:36So let us take the benchmarking on the comparison, not from the budget estimate with the government
07:44is trying to tell us, but from the revised estimates, that is 6.41 lakh crores.
07:52And if we compare this budget of 6.41 to 6.81, we see only an overall increase of 6%.
08:07Now looking at the capital budget, we had 1.72 lakh crores given to us.
08:13It is now 1.8 lakh crores.
08:16It's only an increase of 8,000 crores.
08:20So I just want to bring home the point, do we in our country, in our nation, think that
08:31we are not going to fight a war?
08:35Because in case you have a thinking that the nation is prepared to fight a war, then
08:43the necessary budgetary allocation is to be given to modernize our army, considering the
08:52adversaries, strengths and capabilities.
08:58So this increase as rightly brought up by you is just around 4.65% and if you relate
09:09it to the revised estimate, it will be even less than 4%.
09:15Taking the 4% as the figure, the inflation today is 5%.
09:26So that implies that you are back to the same level and I'm not taking yet into account
09:34the depreciation of the Indian rupee, which is 4.85% since the last year.
09:43So if you combine 5% with the 4.8, you would be left approximately with a figure of 10%
09:54and you have increase of only 4%.
09:57So that implies there is some fault line here in the allocation of the capital acquisition
10:07budget.
10:08One more important area, last year we have underspent 12,500 crores.
10:19Do you not think it is criminal when money is given to you and you are not able to spend
10:26that money?
10:27Who is to be held accountable for this?
10:3112,500 crores we have returned back to the government.
10:39So it brings us to another point that are our procedures very bureaucratic or cumbersome
10:52that we are not able to spend the money?
10:56And if this be so, what are we doing to improve these procedures?
11:02Of course, we have the defence acquisition procedure 2020, we have the defence acquisition
11:08councils meeting regularly, but the bureaucracy is the one who is creating the major obstacles.
11:16I often get to interact with young scientists, young entrepreneurs, startups who are not
11:26able to push their way through into the government bureaucracy.
11:30So possibly through your program, this message must go loud and clear that we need to simplify
11:40our procedures and get the best equipment in the least possible time.
11:47The next important aspect is a modernization plan has already been given and you also alluded
11:57in your opening narrative.
12:00Now this modernization plan, will we be able to get all this within this allocation of
12:10the budget?
12:11We are so far planning, for your information, a procurement of 12 Sukhoi aircrafts.
12:2626 Sukhoi's and one more Scorpene.
12:31Sir, 12 Sukhoi's have been opened.
12:35The latest.
12:36The latest.
12:37Okay, now this 26 Sukhoi's, even if you plan to get, you will not be able to get in the
12:43next one year because of the budgetary allocation, then 240 aero engines of the Sukhoi have also
12:52been contracted.
12:53Yes.
12:55Yes.
12:56Then you have the Reaper drones, 31,000 crores worth of investment from the USA in 31 MQ-9
13:06Sky as well as Sea Reaper drones.
13:12So if you take into account this, all these major acquisitions, what we are trying to
13:19do, it leaves very little space.
13:25No, you know, it's alarming because I go back to, I cannot but help mentioning here that
13:36General B.C. Joshi, God bless his soul and General Shankar Roy Choudhury, General B.C.
13:42Joshi took over in 93, General Shankar Roy Choudhury took over in 95, it's over 30 years.
13:53These two chiefs, while serving, they had said, look, we are not getting enough and
14:00it's a pity that we have to return because whatever you return gets adjusted, means the
14:08next year that much is less because it is adjusted against the new budget.
14:14Absolutely.
14:15Absolutely.
14:16And we see that even now, we are returning 20 or 30 crores, whatever it's, you know,
14:27and that means that the procedure of the acquisition, it's often been said, you know, it's been
14:37revised.
14:38But like you mentioned, you know, interacted with some entrepreneurs, so have I.
14:47And that's been their lament.
14:52You mentioned about the private sector.
14:56I would just like to elaborate on this particular aspect because this is extremely important
15:03because if we are looking at Aat Nirbhara Bharat, we have to focus more on the private
15:12sector and less on the government sector.
15:16Today, 75% of the budget has been earmarked for domestic procurements.
15:24That implies that out of 180 crores, 75, which is a figure of around 130 lakh crores is going
15:47to be spent for the domestic sector.
15:50Now, this 130 lakh crores, you have made a policy that only 25% of this will be allocated
16:01to the private sector and 75% to the public sector, that is the defence PSUs and the ordnance
16:11factories.
16:12Last year's statistics are quite a revelation, which say that when you gave the private sector
16:2025%, they produced 75% of your export targets, means 75% of your exports were through the
16:32private sector and 25% through the public sector in spite of giving them 75% of the
16:41budget.
16:43So, the question here is, and it's quite relevant in our context, because we have a large number
16:50of companies coming into the private sector now, and especially with the FDIs of being
16:57increased from 49% to 74%, so the strategic partnerships are also coming into play.
17:06The OFBs are also, the OEMs are also aligning with the private sector today.
17:14So the question is that, do we not have a case in point in increasing this allocation
17:21to 50%?
17:22Because if we do that, you will see a quantum jump in our exports.
17:30We have pegged the target 2025 as 35,000 crores of export, we are only trying to complete
17:40this target by exporting BrahMos and Akash.
17:47What about the other defence systems with the private sectors getting involved with?
17:52So, it's extremely important here, certain defence reforms are required.
17:59And when the Chief or the Raksha Mantri says that the year 2025 will be the year of defence
18:09reforms, I wish to see this as one of the defence reforms.
18:18The theatreization is a part of the defence reforms of 2025, where three new theatres
18:27are coming up.
18:30The cyber and space are also going to see defence reforms in 2025.
18:37Yes, our main adversary, number one adversary, China has been very, very, very active in
18:44this.
18:46Absolutely.
18:47So, I would like to reiterate this point that let's involve the private sector because
18:56one of the days when Nehru's thought was that defence is a strategic sector, then we cannot
19:06give it to the private sector, we have to give it now because that's...
19:11Certainly not.
19:12Today we have a private sector which has the capability, it has shown the capability.
19:19In some of the naval equipments that you see, it's there, a huge system like an aircraft
19:27carrier, even there, there are Indian entrepreneurs, Indian companies, which have participated
19:35and produced.
19:36Look at the United States, in the United States, the aircrafts, the aircraft carriers,
19:47the submarines are all manufactured by the private sector and that is how the United
19:54States is one of the topmost superpower in the world and China is closely following it
20:02because China also follows a similar policy.
20:07So, it is high time that dependence on HAL, because over a period of time, the Air Chief
20:15is also making a statement that I'm not getting the aircrafts, Tejas Mark 1 and Mark 1 Alpha
20:23are not coming through in the requisite numbers with the Air Force 1s, there is a deficiency
20:31of 12 squadrons of the Air Force today.
20:36And the Air Force Chief has gone on record, he's gone on record very recently.
20:41Yes, absolutely.
20:42He has made a very critical observation about the slow delivery of combat aircraft to the
20:54Air Force.
20:56So, if we look at these statements, because after all, the Air Force Chief will not make
21:03such a public statement unless it was necessary, unless it was to make the government realize
21:10that it is high time we start looking at these things and if we are going to rely on Aat
21:19Nirmal Bharat, I don't think the Air Force will be able to get these 12 squadrons in
21:24the next 20 years.
21:25So, there is now a requirement and you must have your plan ready to equip your Air Force
21:34with either F-35s or Sukhois 57, because right now the debate is on whether India would like
21:43to invest in F-35 or the Sukhois and more so when you have to make up the shortfalls
21:52of your squadrons.
21:53But the second most important aspect is, which possibly we haven't discussed in much media
22:01is our air defence system.
22:05The air defence here, I think needs a more deliberate focus, especially when we see the
22:15Iron Dome like system in Israel and now President Trump also made a statement that USA also
22:27needs an Iron Dome kind of air defence system.
22:31If USA can feel the pinch of its existing air defence system in spite of Petrods and
22:42Tharts and all that, I think that India is very largely affected and I am given to understand
22:52that Akash Teer, that is the new air defence acquisition which is going to control all
23:02air defence assets in the country today.
23:05We have the Sukhoi Russian system also coming, we have the Prithvi missiles, we have the
23:15Akash and we have the Barak-8 LR SAMs and we have the S-400 with us.
23:24So we have a plethora of air defence system, but we require a system which is going to
23:30be automated, which is going to be sensor based and which will launch the right kind
23:39of air defence missile depending upon the threat.
23:44And that is why this Akash Veer is coming through.
23:47I am given to understand that 455 of these systems are on the anvil, 107 have been delivered,
23:56105 are going to be delivered in March 2025 and the balance in March 2027.
24:02So let's hope this goes through and for this budget is required.
24:08And so far, I would like to see a commitment from the government to state that the budget
24:19has been catered for, for the next two years for the acquisition of the Akash Veer air
24:28defence missile system.
24:30And one more important aspect is we would also like to be confident that this Akash
24:40Veer is going to deliver.
24:42So possibly the integration of the Army Air Defence Corps and the Indian Air Force has
24:50to be done in a very, very closely coordinated manner because both of them will be actively
24:58involved in the air defence of the nation.
25:00So this is one important aspect I wanted to bring out in our talk today because over the
25:08years we have been relying on Strelas, Tungushkas, Shilkas, L-60s, L-70s.
25:21The days of all these weapon systems are over now because we have to have long range vectors.
25:30We have to engage the targets in excess of 2,000 kilometres.
25:35We cannot think of 50, 60, 70 kilometres now.
25:39So considering that the enemy is also working on this technology, I would like to highlight
25:48some areas of technology like artificial intelligence, quantum computing, machine learning, hypersonics
25:58and robotics because these are the five technologies which need to be assimilated into the defence
26:06forces and the budgetary allocation is actually affecting the amalgamation of these technologies
26:14into our systems.
26:15Today 2024 was declared as the year of the absorption of technologies by the Army Chief.
26:26Technology absorption.
26:27I would like the Army Chief to bring it out that in 2024 what all technologies and to
26:47which extent have been absorbed into the Indian Army because if that was your year where you
26:53had to focus on absorption of technology, let us see how far have we reached there and
27:05it will be an eye-opener because once this information actually comes out, it will be
27:12an eye-opener for us to see that how much of distance we have yet to cover and that
27:20is why when we compare with China, when we compare with our adversaries because China
27:27is the main adversary today, for your information sir, China has an increase of 17% last year
27:36towards defence budget.
27:39Pakistan has 17.5% increase of budget.
27:49So these two countries are equally bothered as we are bothered to improve our posture
28:01of defence.
28:02Are we only going to be a defensive posture or do we have any offensive element also built
28:12into our strategy or our doctrines?
28:15That is extremely important because…
28:20You see the irony is that we do not, we have tremendous capability which we have only displayed
28:28like, you know, once in 2016 in the form of those surgical strikes and once a little later
28:39in 2019 Malakot strike.
28:43We have tremendous capability but I think we need much more of political will to…
28:54because we cannot take for granted that China is armed itself very heavily throughout, you
29:06know, line of control, it's created about I think 600 odd villages, it's doing so much
29:16on the ground and we cannot afford to be, you know, we cannot afford to be found wanting
29:25if there is a push comes to shove and there is a confrontation and you cannot at all,
29:34you know, say that there will not be so.
29:37Absolutely right and the infrastructure to talk about China, since you raised the issue
29:46of the border areas, the infrastructure or the border roads organization, I feel would
29:54be disappointed with this budget because from 6500 crores you have just reached around 7100
30:00odd crores.
30:02So we were expecting a much more increase, as a matter of fact in my article I had suggested
30:11or I was hoping that at least the border roads will get 10,000 crores because see, China's
30:20activities on the LAC we are not able to control.
30:26China's infrastructure development is going at such a fast pace that I don't think…
30:34And they began much earlier than us.
30:36Yeah.
30:37They began much earlier than us.
30:38So in case we have to match our own infrastructure on the borders with China, there needs to
30:46be absolutely a fast track process and for that fast track process you must, you need
30:56money and if that money is not going to be there and if, for information sir, I was just
31:05very interested in the statistics I saw today, out of the 1 rupee which the government spends,
31:14it spends 8 paisa on defence.
31:20That means that after every 1 rupee of our expenditure, only 8 paisa is spent on defence.
31:28So it clearly tells you that this sector is not getting its due what it should get.
31:36No, no, it is not, it is not.
31:39Therefore we need to keep on reiterating these aspects till the cows come home to bring out
31:48the fact that the national security of a country is extremely important.
31:55Today if there is a war, the consequences of war can be disastrous in case the nation
32:05is not strong enough.
32:10So for the nation I mean the armed forces.
32:15So you have to strengthen your armed forces.
32:18Schemes like Agnivir should be shown the back door because today our armed forces strength
32:31has been reduced from 13 lakhs to 11 lakhs.
32:36The border management has increased.
32:39Bangladesh border, we are seeing deployment now happening.
32:47China border is eyeball to eyeball.
32:51Line of control is eyeball to eyeball.
32:55Why do you think the revenue expenditure is going up, sir?
32:57Why do you think revenue expenditure is going up?
33:01It is going up because the troops have to be maintained on the borders and are increasing
33:06by the day and that is why the revenue expenditure is almost 46% of the budget.
33:16People say that revenue expenditure should be reduced.
33:18How can we reduce?
33:21Because the threats are there, the cost of fuel, the cost of ammunition, the cost of
33:28aircrafts like today have increased, the cost of convoy movements, feeding the troops in
33:37the high altitude areas.
33:40So we have to look into this entire thing in a holistic manner and I think it's high
33:46time this from 1.9% of the GDP and if you remove the pensions, it becomes 1.48% of the
33:56GDP.
33:57This 1.48% definitely should go up to 2% if not 2.5% and gradually over a period of five
34:07years, we must get a 3% share of the GDP because unless we are going to do that, unfortunately,
34:13we are going to remain where we are.
34:18Jailkocha, thank you very much.
34:22You've given us a lot but I'm afraid for a shortage of time, we have to finish here.
34:31Thank you very much and all the best.
34:34Thanks a lot, sir.
34:35It was a pleasure to be on the show, sir.
34:37Jai Hind.