Defence Budget Allocation : Discussions

Bali78

Senior member
Dec 26, 2017
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1,072
USA
Personally I am quite disappointed with this budget. It is understandable that for last 5 years this government was giving higher priority to social and infrastructure expenditure over defense. But what's the point of ignoring defense sector even after winning a massive mandate ?? Particularly when Balakot was milked to it's core during election, what is the reason for such indifferent attitude ??
 
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_Anonymous_

Senior Member
Dec 4, 2017
12,639
8,158
Mumbai
Personally I am quite disappointed with this budget. It is understandable that for last 5 years this government was giving higher priority to social and infrastructure expenditure over defense. But what's the point of ignoring defense sector even after winning a massive mandate ?? Particularly when Balakot was milked to it's core during election, what is the reason for such indifferent attitude ??
@randomradio
 

randomradio

Senior Member
Nov 30, 2017
8,638
6,060
India
Personally I am quite disappointed with this budget. It is understandable that for last 5 years this government was giving higher priority to social and infrastructure expenditure over defense. But what's the point of ignoring defense sector even after winning a massive mandate ?? Particularly when Balakot was milked to it's core during election, what is the reason for such indifferent attitude ??
No one's expecting major hikes in defence expenditure until 2021 or 2022. That's how long people expect private sector spending to go back to normal.

Until then emergency procurements and GTG deals will continue.
 

Sathya

Senior member
Dec 2, 2017
2,009
1,019
India
So no MII Rafale, probably another 36 because no Indian specific modifications costs or base accommodation costs.

Only Lca, because u can extract work without paying. And whatever paid stays in country.
 

Ashwin

Agent_47
Staff member
Administrator
Nov 30, 2017
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Bangalore
It's just facts.

By 2030, we will be able to procure weapons at least half as much as the US does today. By 2040, as much as what they do today.

Let's look at central govt expenditure, which is where the defence budget comes from. This year it is well above $400B. It was a 13% growth from last year. And even if we assume a modest 9% growth rate all the way from now to 2040, which is extremely realistic, the govt's expenditure in 2030 will be $1T, and in 2040 it will be $2.3T.

Assuming the defence budget to have a 15% share of expenditure, we are looking at a defence budget of $345B in 2040. Assuming 25% goes to the IAF, their budget is roughly $86B, and with half going towards capital purchases, that's $43B. Whereas 200 Rafale would cost us $21B. In the US as well, half the air force's capital budget goes towards fighter jets. So what I've made is a very realistic assumption. The Pentagon recently signed a 3-year deal for 478 F-35s for $34B, so the economies of scale has made it cheaper, which means the Rafale will also not cost $21B if we make 200 of them a year. Different story whether we even want such a large defence budget, and naturally we wouldn't want Rafales all the way in 2040.

We ordered 140 MKIs for $3.5B when our defence budget was $10B in 2000. The first time we ordered MKI, we paid $1.5B for 50 when our defence budget was $7B. So it's not going to be anything special when we sign a $15-20B deal for 114 Rafales when our defence budget will be $70B in 2023-24. It's actually underwhelming and disappointing that we are spending so less for a long term project that will only start seeing significant money outlow 3 years after contract signature.

Point being, whatever we start after 2025 is going to be insignificant compared to the size of the defence budget, so people need to stop worrying about money. It's annoying to see people overreacting for ridiculously mundane stuff.
I'm really bored of this overoptimistic story of how defence budget will be so huge in the 'future' and how we will be able to afford these overpriced numbers.

Let's take a look at the last 5 years of CAPEX change under this Govt.
Budget 2013-14 BE : Rs 86685 crores
Budget 2018-19 RE : Rs 93800 crores


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Growth of 7.5% in 5 Years !

Overall budget increased to keep up with inflation. But OROP and pay commission took it all. ie, Modernization budget was constantly going down in real terms.

They are struggling to pay for ongoing orders. So, Pardon me for being skeptical about the promised land.