The presentation of annual defence budget is an exercise in futility.

The increase in defence budget from Rs.147,344 crore (Rs 1,473.44 billion) in fiscal 2010-11 to 164,415 crore (Rs 1,644.15 billion) in fiscal 2011-12, reflects a gain of 11.59%.

In real terms, if one looks at the inflation, there is no increase in the Budget.

In fiscal 2010-11, the defence budget allocations were approximately 2.34 per cent of the gross domestic product and in fiscal 2011-12 with the rising GDP they almost remain the same.

There is not only a standard 'status-quo' in the defence budget, but also a vague promise as usual by the finance minister that 'any further requirement for modernization of the armed forces will be met'.

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The defence minister has complicated the defence procurement procedure such that it prevents procurement.

Even this meagre money is surrendered at the end of the financial year regularly.

By shifting commas and rewording the chapter headings, the defence budget is incapable of meeting the rapidly growing threats against India.

With the two-front war that can be imposed on India and now the instability being created through the 'Jasmine Revolution' in Asia requires an extremely stable India.

To achieve this, it is vital that India arms itself with extra ordinary military capabilities to tackle the three pronged threat.

First, the burgeoning internal threat where the civil administration continues to surrender to the insurgents like Maoists in Orissa.

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Second, the internal instability being created by the 'Jasmine Revolution' in China is likely to make Beijing divert the attention of its citizenry by imposing a short swift war on a soft target like India.

Third, the long-term instability being created by 'Jasmine Revolution' in Asia and Africa will require projection of India's military power to lend a helping hand, as well as safeguard the Sea Lines of Communication to enable energy imports and trade.

The Finance and the Defence Ministers have indulged merely in repeating the follies of the past budgets as an annual ritual instead of looking at the above 'Big Picture' of threats that India faces.

The Defence Budget in 2011 should have earmarked the following resources for the defence forces:

• Three per cent of the GDP for the next five years should be set aside for modernisation of the Indian Armed Forces. This will help in long-term planning as sophisticated and technology driven military hardware can neither be bought off the shelf nor inducted overnight.
• The rapid march of technology has left India behind by almost twenty years in comparison to the West and China. The Indian imports of weaponry have increased from 70 per cent to 80 per cent despite the fraudulent mantra of indigenisation.
  The defence budget should have raised FDI from 26 per cent to 49 per cent and up to 75 per cent depending upon the cutting edge technologies being brought in to the country.

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This will reduce the 'technology deficit' and ensure that defence factories are setup within the country to marginalise sanction regimes.
This change in policy will provide enormous lateral spinoffs for the civil industry as well.

• With shortages of young human resources to the tune of 14,000 officers, the defence budget should have endeavored to create an extra ordinary compensation package to attract the young to serve in the military.

The problem of technology deficit cannot be solved by merely allotting resources to the military.

The inconsistencies and lack of decision-making capabilities by the defence minister in the last six years has left the Indian Armed Forces in lurch.

The abortion of purchase of air-to-air refueler and 197 helicopters for the Indian Army at the last minute have not only denied urgently required capabilities to the military but have also made India a laughing stock.

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Further, by touting 'indigenisation' and yet signing a 25 billion dollar deal for the fifth generation fighter aircraft to be developed in a foreign land that takes away direct benefits and spinoffs to our industry depicts a careless and superficial approach to policy making.

The lack of logic in policy-making will increase India's dependency on imports.

The defence budget, which is neither here nor there, reflects Prime Minister Singh's consistent promotion of 'incompetence' at the ministerial and bureaucratic level.

The fast multiplying internal and external threats to the Union of India cannot be handled by the depleting and ageing military holding outdated equipment if 'push' comes to a 'shove'.

The announcement of Monday's defence budget depicts inability and paralysis in the leadership to come to grips with the grave security scenario pitfalls facing the country.

The writer is Editor, Indian Defence Review