Saturday, 13 July 2019

Blue Mountains: Lush tea gardens to abundant wildlife, the Nilgiris still exerts a gentle charm

By Ajai Shukla
The Nilgiris
Business Standard, 13th July 19

After defeating and killing Tipu Sultan in the Third Mysore War in 1799, the East India Company consolidated itself in the Deccan. From their administrative headquarters in Coimbatore, bored and sweaty British officials longingly eyed the inviting hills visible to the northwest – the Nilgiris (blue mountains) that Mysore had just ceded to the British. Soon, junior officials began foraying into the hitherto unexplored hills, bringing back glowing reports of teeming wildlife and “downs” in the upper reaches that were reminiscent of Scotland. In 1819, John Sullivan, the visionary Collector of Coimbatore District, led an expedition into the Nilgiris, and quickly earmarked its gentle climate and rolling hills for an English settlement, and a sanatorium for wounded soldiers. Marking Sullivan’s entry, the Nilgiris commemorates its bicentennial this year.

In contrast to the dreary, over-crowded, barely regulated hill stations of North India, such as Shimla, Manali, Nainital and Mussoorie, the Nilgiris – which became a full-fledged district in 1882 – remains a leafy, tea garden paradise with an old-style flavour. Getting there requires a flight to Coimbatore from where it is a two-hour drive to Coonoor or Kotagiri. The third urban centre – the district headquarters of Udhagamandalam (Ooty) -- is another 45 minutes away. Alternatively, there is the six-hour drive from Bengaluru, via Mysore, through the scenic Mudumalai National Park, which has the highest tiger density of any Indian sanctuary and teems with deer, elephants and the magnificent Indian gaur.

Toda buffalo at the Mukurthi National Park

The Nilgiris shares borders with Kerala and Karnataka. On three sides of the district lie some of India’s foremost national parks – Aralam, Mudumalai, Mukurthi, Nagarhole, Bandipur and Silent Valley – and the Wayanad and Sathyamangalam wildlife sanctuaries. Together, these form the Western Ghats Biosphere Reserve, a Unesco World Heritage Site. Numerous animals transit through the Nilgiris as they migrate between these sanctuaries, making it commonplace to encounter a leopard, elephant, bison or, if one is lucky, a tiger. Pet dogs cannot be left out at night; a leopard would snap them up in quick time. A couple of years ago, a herd of elephants, with their calves, walked into Coonoor town, posing a new challenge to the laidback traffic department. Herds of bison browse through the tea gardens; when they cross the road, drivers agreeably give right of way to these moody, one-and-a-half tonne beasts. Mutual accommodation is essential, since “biosphere reserves” are normally free of human habitation. In the Nilgiris, 750,000 people live cheek-by-jowl with the wildlife. 

Large herds of one-and-a-half tonne bisons browse for weeds amidst the tea bushes

Unlike most hill stations, where residents must ship in supplies from the plains, the Nilgiris is the most stylish of resorts. The markets in Coonoor and Ooty are stocked with fancy vegetables like asparagus and broccoli, boutique chocolates, excellent homemade cheeses and branded, high grown Nilgiri teas. Inevitably, the smart set from Chennai, Bengaluru, Mumbai and now Delhi is moving to the Nilgiris in numbers. Businessmen like Azim Premji and Nandan Nilekani have residences in the Nilgiris and many others are making it their full-time home. Coonoor’s most famous former resident, Field Marshal Sam Manekshaw, was amongst the first of many military officers to have retired to the Nilgiris, given the medical facilities and spectacular golf course at the Defence Services Staff College in Wellington, near Coonoor. Tamil Nadu’s former chief minister, J Jayalalithaa, too, built her home in the Nilgiris, administering the state from there for months at a stretch while her senior officials shuttled back and forth from Chennai.

People from Coimbatore, Chennai, Bangalore and Mumbai are buying up century-old bungalows

While the Nilgiris’ outstanding roads and governance are ascribed with a wink and a nudge to Jayalalithaa’s influence, the mountain district’s tradition of excellent administration dates back to Sullivan. Currently, the Collector (as Tamil Nadu designates its District Magistrates) is the dynamic J Innocent Divya, whose gentle presence belies the fear she has struck into the hearts of polluters and irregular builders. Obtaining a sanction to build in the Nilgiris invites an exacting multi-layer scrutiny from the forest, geology and agriculture departments. Excavating stone is banned and earthmoving machinery strictly regulated.

A view from Kodanad, looking out over the Deccan plateau

Meeting me in her elegant colonial bungalow in Ooty, Divya said she believed her primary duty was to maintain the Nilgiris in the pristine shape that she first encountered as a visiting schoolgirl from Tuticorin. “Tourism is good for local livelihoods, but too much tourism can kill tourism”, she told me firmly. With two million visitors per year, the bulk of them during the prestigious Ooty Dog Show and Ooty Flower Show each May, Divya has moved to ban plastic packaging from her district. From August 15, even mineral water bottles will be taboo. To cater for thirsty visitors, the administration is establishing “Water ATMs” along the highways and at tourist spots like Dodabetta – the highest peak in the Nilgiris.

Displaying an unusual cultural sensitivity, Divya says her administration has a moral responsibility towards the indigenous adivasis – the Toda, Kota, Kurumba, Katunayakar, Irula and Paniya tribes – which had safeguarded the fragile Nilgiri environment for centuries before the British colonized the hill district and began growing tea here. The very existence of these tribes is now threatened with their numbers down to just 35,000 people. With fertility declining, so are those numbers.

An old temple of the Toda tribal community

One of the signature features of the Nilgiris is the tea garden landscape, the hills covered by a seemingly endless green carpet of manicured bushes. For the locals, however, tea is serious business that, alongside tourism, underpins livelihoods. Tea growing began in the mid-nineteenth century, but gained momentum in the 1860s after the British brought in a group of Chinese prisoners from the Opium War to teach tea growing in the Nilgiris. During the Great Depression of 1930-1933, coffee exports collapsed, providing impetus to tea instead. In the 1980s, after tea was included in the list of products eligible for export to the Soviet Union under the rupee trade agreement, every farmer became a tea grower. To help those 20,000 small growers sell their tea, the Tamil Nadu government set up 15 cooperative tea factories that still buy plucked leaf from small farmers. At the turn of the century, the tea bubble burst due to a combination of factors, especially the collapse of the Russian export market. Today the Nilgiri tea industry is struggling to survive, its 70,000 hectares of gardens reeling under rising labour costs, as well as new competition from growers in Sri Lanka and Kenya.

Tea gardens are increasingly under threat as labour costs rise

Winding its way through tea gardens and forests is the quaint Nilgiri Mountain Railway, which Unesco designated a World Heritage Site in 2005. This is regarded as one of the world’s most authentic and original “rack and adhesion” railways with its stations, signalling, locomotives and rolling stock unchanged from when it was completed in September 1908.

The Nilgiri Mountain Railway, a Unesco World Heritage site, climbs from 1,700 feet to 7,300 feet in just 46 km

The Darjeeling Himalayan Railway from Siliguri to Darjeeling is India’s oldest mountain railway, built in 1880. The longest is the 96 kilometre-long Kalka-Simla Railway, built in 1903. The shortest one is the Matheran Hill Railway, built in 1907, a 21-kilometre stretch that connects the little hill station to Mumbai. And the Nilgiri Mountain Railway is the steepest, not just in India but in all of Asia. Starting from Mettupalayam at an altitude of 1,700 feet, it climbs in just 46 kilometres to Ooty at 7,300 feet.

For the parched plains of Tamil Nadu, the Nilgiris – which catches 150 to 300 centimetres of rainfall from both the southwest and northeast monsoons – is an ecological mother lode of water and electricity. In a marvellous feat of British-era engineering, the district’s mountain rivers have been harnessed into an interlinked series of dams and hydro-electric power stations. Water from lakes at higher elevations is released through tunnels or natural waterways into lakes at a lower altitude, with power generated from the drop. By channelizing water from one basin to another, the Nilgiris generates 661 megawatts of power – one-third of Tamil Nadu’s installed hydel capacity.

 Each of these mountain lakes, such as Pykara, is a visual delight. A half-hour speedboat ride on Pykara Lake takes one into virgin forests, from where elephants, deer and wild boar tentatively emerge to drink from the lake.

 Ralliah Dam lake supplies drinking water to Coonoor

Notwithstanding the bounty of its natural riches, the Nilgiris lack facilities like good hospitals or a functional intensive care unit. Hope flared in 2017 when Christian Medical College, Vellore took over one of the only functional private hospitals: the Kotagiri Medical Foundation (KMF), Meanwhile, a local joke about the rude good health of Nilgiri residents still does the rounds: “In Ooty, they live to eighty; in Coonoor, it’s till ninety; and in Kotagiri, they have to shoot them to kill them.”

Wednesday, 10 July 2019

Last chance to get technology: Negotiating next six submarines will take years, says Navy

Acknowledges project to build six Scorpenes (above) failed to bring adequate technology

By Ajai Shukla
Business Standard, 10th July 19

One of the navy’s most vital purchases – the contract for six new-generation submarines under what is dubbed Project 75-I – will take another two-to-three years in tendering, revealed the navy’s warship acquisitions chief on Monday.

This is because the contract, worth an estimated Rs 50,000 crore, will be India’s last overseas submarine procurement and hence the last chance to obtain the technology for building the next 12 submarines, which the government insists must be fully indigenous.

“When interacting with the original equipment manufacturers (OEMs) we have to be very clear that, after this technology transfer, we should be able to build our [future] submarines ourselves”, said Vice Admiral AK Saxena, Controller of Warships Production and Acquisition in New Delhi.

The 30-year submarine building plan of 1999 mandates building 12 submarines with foreign technology transfer, and the next 12 vessels indigenously.

Saxena is the first naval officer to acknowledge that insufficient technology has been transferred during the on-going Project 75, which involves building six single-hulled, Scorpene-class submarines with knowhow from French-Spanish shipbuilder Armaris (now Naval Group). 

“The depth of design transfer is not that high as we would have liked and that technology gap is what we are going to fill up with Project 75-I”, he said.

Saxena also acknowledged that India was better at building nuclear submarines than conventional ones. “Our design capability is currently more focused towards strategic platforms (nuclear submarines)”, he said. 

Consequently, negotiating the “scope, bandwidth and depth of technology transfer” with the Project 75-I OEMs will be vital, said Saxena. “We will have to ensure that our SPs, that is the Indian shipbuilders, are able to absorb whatever is being provided by the OEMs. It will all depend upon how forthcoming the OEMs are…” he said.

Project 75-I is being executed under strategic partner (SP) framework. This requires foreign OEMs to provide technology and manufacturing knowhow to an Indian SP shipyard, chosen from either the private or public sector.

Leading the fray for selection as SP are Mazagon Dock Ltd, Mumbai (MDL) and L&T’s Kathupalli Shipyard, near Chennai. The navy will also invite Reliance Naval (RNAVAL) to bid, given the capacity of its Pipavav Shipyard. However, RNAVAL’s financial situation might not meet the tender’s tough financial eligibility conditions, mandated in a March 20 amendment to the Defence Procurement Procedure of 2016. 

The navy had earlier taken a stance against RNAVAL, which is years late in delivering an order for naval offshore patrol vessels (NOPVs). However, Saxena said RNAVAL was finally making headway on delivering the first NOPV and that “By the end of the year, it will be clear whether RNAVAL will be able to deliver or not.”

Saxena expressed optimism that the OEM and SP would meet the challenging 50 per cent indigenous requirement of Project 75-I. However, he appeared to dilute the mandated terms, indicating it would be achieved only later in the project. 

“Achieving indigenous content of 50 per cent is the progressive value we are looking at. It will progressively rise from a certain value and reach or exceed 50 per cent”, he said.

Tuesday, 9 July 2019

Book Review: Fighting in the Shadows

The New Rules of War: Victory in the Age of Durable Disorder
By Sean McFate
HarperCollins, 2019
318 pages
Rs 1,699 (on Amazon)

Several authors have analysed the shifting templates of modern warfare, but few have the credentials that Sean McFate brings to his writing. He has served as a paratrooper in the United States army’s elite 82ndAirborne Division. He then went on to become a mercenary soldier in Africa, with one of the shadowy “private contractors” that rent out armed forces, no questions asked. Adding academic rigour to that battlefield perspective, he is currently professor of strategy at the National Defense University and Georgetown University, both in Washington DC, USA. This is his second non-fiction book on war, after his 2017 work, The Modern Mercenary.

In this book, McFate takes a cold-eyed look at the changing face of conflict over the last half century. He argues that war and force engagements have changed form dramatically, as the world has entered an age of “durable disorder” characterized by China’s rise, Russia’s resurgence, America’s retreat, the advance of global terrorism, the emergence of international criminal syndicates, wealthy and influential multinational corporations with resources larger than many countries and well-armed mercenary organisations that provide the wherewithal for countries, organisations and individuals to meddle deniably in hotspots anywhere. Instead of declared wars with tanks rolling across international borders, we have “shadow wars” such as Russia’s annexation of Ukraine’s Crimea. McFate recounts how, with President Vladimir Putin feigning innocence, Moscow occupied parts of Ukraine, such as Donetsk, with its so-called “little green men” (military troops without uniform), elite Spetsnaz Special Forces, mercenaries and proxy militias that Russian leaders passed off as Ukrainian “self defence groups”. Russia’s denial of any links with this ghost occupation force made Western powers chary of intervening in a situation where even the basic facts remained contested. By the time Russia’s involvement became clear, the occupation was a fait accompli. McFate tellingly points out that, in the 1950s and 1960s, Russia crushed anti-Moscow protests in Hungary and Czechoslovakia under its tank treads. It could have done the same in Ukraine, but chose a “shadow war” instead, given that even implausible deniability was better than the opprobrium that would attend an old-style blitzkrieg invasion.

None of this is actually new, says McFate. The world is merely returning to the pre-Westphalian era when, in conflicts like the “30 Years War”, mercenary armies, owing shifting allegiances to whichever monarch, aristocrat or religious leader was paying them, laid waste to much of Europe, pillaging and raping indiscriminately. In 1648, the Treaty of Westphalia ended this carnage by recognising the monopoly of states on armed force, a consensus that largely held through the 20thcentury. But now force is again being wielded by non-state entities – such as religious groups, local militias, mercenary forces and corporations – even as the forms of force change and evolve.

In ten successive chapters, the book describes ten rules that govern modern warfare. “Rule 1: Conventional War is Dead”, postulates the demise of the Westphalian order and World War II style conventional war, even as contemporary generals prepare, as generals have through the ages, to fight the last war. McFate points out that, of fifty armed conflicts worldwide in 2015, only one was a conventional war. Yet orthodoxy prevails in planners’ minds. “Rule 2: Technology Will Not Save Us”, points out that nuclear submarines, aircraft carriers and the F-35 stealth fighter (“the most expensive weapon in history”) are practically unusable against contemporary threats such as terrorist strikes, cyber attacks, Russia’s aggression in Crimea or China’s creeping acquisition of the South China Sea. Yet, most of America’s enormous defence budget goes on those, with relatively few resources spent on usable forces, such as Special Force units, which remain underfunded and in insufficient numbers.

One of the book’s most provocative arguments is in “Chapter 7: New Types of World Powers Will Rule”. While the concentration of wealth in the hands of the top one per cent is well known, McFate argues that hyper-wealthy corporations like Walmart (which he wrongly says has a larger economy than India) now have the option of hiring mercenary forces to protect their interests. Why would companies like ExxonMobil and Shell remain tethered to corrupt governments such as Nigeria’s, when they can better protect their interests through hiring mercenary groups? Similarly, organised crime syndicates, and even terrorist groups, can today boost their lethality by hiring mercenaries for strong-arm operations. An Uzbekistan-based mercenary group, Malhama Tactical, already specialises in providing armed fighters to Islamist jihadi groups. Fascinatingly, McFate returns to history to demonstrate that none of this is new. In the 17thand 18thcenturies, the British East India Company set up its own private army to conquer, subjugate and plunder an entire sub-continent. One of the first Indian words to enter spoken English was “loot”.

McFate concludes by urging thinkers to shake off their “strategic atrophy”, since “conventional war thinking is killing us.” In the current information age, warfare will move further into the shadows, he predicts, where the arbiter of victory will be strategic subversion, not battlefield victory. Future wars will not begin and end, but will hibernate and smoulder, occasionally bursting into active fighting. This trend is already evident from the number of “neither war, nor peace” situations around the world. McFate has clearly written for a western readership, but the Indian reader can hardly miss how much of this applies directly to our own security challenges. This book should find a place on the bookshelves of all our strategists.

Monday, 8 July 2019

As China looms, India redirects foreign aid to Indian Ocean countries

Indian Ocean countries get a larger share of Indian aid as New Delhi counters China (photo: Modi visits Maldives)

By Ajai Shukla
(Edited version in) Business Standard, 8th July 19

To backstop India’s influence in its extended neighbourhood, Friday’s budget has raised the allocation for providing financial aid to friendly regional countries by over 26 per cent. Last year’s revised allocation of Rs 6,667 crore has been upped to Rs 8,415 crore in 2019-20.

The aid budget has not just being raised, but redirected as well. While Bhutan retains its slot as India’s largest aid recipient, Indian Ocean island countries and littoral states feature high on the list of large aid recipients.

After Bhutan, which has been allocated Rs 2,802 crore this year, tiny Mauritius will be the second-largest recipient of Indian aid, with Rs 1,100 crore allocated. Another island nation, the Maldives, is in fourth place with Rs 576 crore allocated. Seychelles has been allocated Rs 100 crore, while Rs 450 crore has been budgeted for African countries.

Aid flows to Indian Ocean

Largest aid recipients in 2019-20
Largest aid recipients in 2018-19
Largest aid recipients in last decade

Bhutan (2,802 cr)
Bhutan (2,510 cr)
Bhutan (32,280 cr)
Mauritius (1100 cr)
Nepal (750 cr)
Afghanistan (4,855 cr)
Nepal (1,050 cr)
Mauritius (660 cr)
Nepal (4,156 cr)
Maldives (576 cr)
Afghanistan (470 cr)
Mauritius (2,520 cr)
Africa (450 cr)
Maldives (440 cr)
Africa (2,368 cr)
Myanmar (400 cr)
Myanmar (370 cr)
Sri Lanka (2,317 cr)
Afghanistan (400 cr)
Africa (330 cr)
Maldives (1,787 cr)

In all these Indian Ocean Region (IOR) countries, Beijing has expanded its presence using its financial heft and promises of infrastructure development. Now, New Delhi is equipping itself to compete, albeit with lesser resources.

A decade ago, New Delhi’s aid budget was just 30 per cent of what it is today. More than half of the Rs 2,428 crore budget in in 2009-10 went to Afghanistan and Bhutan, leaving little for the IOR countries. Seychelles and Mauritius did not feature on India’s aid list then and the Maldives got a token Rs 3 crore.

Not until 2016-17 was financial aid earmarked for these IOR island states. That year also saw the first specific allocation for developing Chabahar Port, in Iran: a meaty Rs 100 crore. However, US sanctions on Iraq ensured no allocations were made in 2017-18 and 2018-19. This year, Chabahar features again, with an allocation of Rs 45 crore.

India’s humanitarian aid commitment to Afghanistan, which is widely praised by the international community, has tended to dominate New Delhi’s aid discourse. In fact, budget documents show that Afghanistan is a distant second to Bhutan. Since 2001-02, India has disbursed Rs 5,931 crore to Afghanistan. During this period, Bhutan received Rs 40,850 crore. Even Nepal received almost as much as Afghanistan during this period: Rs 5,071 crore.

National Security Council Secretariat (NSCS)

Meanwhile, there is speculation over large expenditures by the NSCS, which have come to light in the budget documents. While the NSCS budget for 2018-19 allocated Rs 304 crore, the revised allocations anticipate an expenditure of Rs 842 crore – almost thrice the budgeted sum. This includes a capital allocation of Rs 715 crore, whereas the budget estimates did not allocate a capital budget to the NSCS.

Sources in the NSCS say there is curiosity within the secretariat about where this amount has been expended, and what assets have been created with the Rs 715 crore capital allocation. The NSCS recently occupied an additional floor in the government building it is headquartered in, but refurbishments could not have cost more than “a couple of crore”, say the sources.

There is speculation that at least some of the money could have gone into organising Prime Minister Narendra Modi’s large rallies in New York, London and Sydney.

The NSCS is an executive body that advises the prime minister’s office (PMO) on matters of national strategy and security. There are limitations on the audit scrutiny of expenditures made by the NSCS. 

Sunday, 7 July 2019

Defence salary bill leaves less for new weaponry

Over the last 3 years, salaries and running costs have risen 25%, but the modernisation budget has grown by only 15%

By Ajai Shukla
Business Standard, 7th July 19

The modest 6.35 per cent rise in defence allocations – from Rs 405,193 crore in last year’s revised estimates, to Rs 431,011 crore in Friday’s budget – presents an even more worrying picture when the budget is disaggregated.

A Business Standard analysis of the defence budget in a three-year window indicates that most of this scanty rise is accounted for by the revenue heads of manpower and running expenses. Meanwhile, the important capital budget component, which funds equipment modernisation, has grown significantly slower.

From the baseline of the 2016-17 budget to the present, three annual increments have raised spending on the three services by a total of 23 per cent. During this period, allocations for manpower (including salaries and pensions) have grown by 26 per cent, while running costs have grown by 25 per cent. In comparison, the capital budget has grown by only 15 per cent, averaging barely four per cent each year.

This factors in allocations made to the army, navy, air force and coast guard; but not to the defence ministry, the Ordnance Factories (OFs) and the Defence R&D Organisation (DRDO). It also assumes the defence budget will be spent in full this year, rather than returning a part of it unspent, as has happened in preceding years.

Government sources argue this year’s capital allocation of Rs 108,248 crore cannot be increased further, since it already accounts for one-third of the central government capital expenditure of Rs 3,38,569 crore.

Defence industry executives also underline a compensatory factor: the benefits of customs exemption that Finance Minister Nirmala Sitharamanannounced on the import of defence goods that are not made in the country. This will make defence imports cheaper by 10.3 per cent, which is the basic customs duty, and effectively increase the capital allocation by 5.15 per cent, assuming half of all capital procurements are imported.

Effectively reduced by 10.3 per cent will be the prices of Rafale fighters, P-8I maritime patrol aircraft, naval helicopters, Apache and Chinook helicopters from the US and S-400 missile systems, Krivak class frigates and a nuclear submarine in the pipeline from Moscow.  

There is uncertainty over who will control the DRDO’s research budget, which amounts to Rs 10,484 crore this year. In her budget speech, Sitharaman announced that the government proposed to establish a National Research Foundation (NRF) to “fund, coordinate and promote research in the country.”

“NRF will assimilate the research grants being given by various Ministries independent of each other”, she said. It is unclear whether the DRDO budget will be subsumed under this.

Besides the DRDO’s research budget, the government allocated Rs 95 crore towards “Make” category projects, which involve Indian companies developing complex defence platforms. Last year, the defence budget had allocated Rs 142 crore under this head, but the revised estimates brought it down to Rs 2 crore, indicating that the money had remained unspent.

The budget has dissatisfied all three services, who believe their role entitles them to a larger share of the defence budget. The army, by far the largest service, which is involved in counter insurgency duties year-round, notes that its share has come down over the last three years from 68.5 per cent to 66.5 per cent of the military budget.

The navy, which backstops the country’s Indo-Pacific strategy and requires more warships, wants more than the 13.75 per cent that its allocation is stagnating at. The air force, whose budget has grown by almost two percentage points, wants a larger capital budget to fund a slew of fighter purchases in the pipeline.

Saturday, 6 July 2019

Defence budget inches lower towards 2% of GDP

Allocations are Rs 50,640 crore lower than 2014-15 levels of spending

By Ajai Shukla
Business Standard, 6th July 19

Finance Minister Nirmala Sitharaman has allocated Rs 4,31,011 crore for defence spending (including military pensions), the same as in the February 1 interim budget. As a proportion of the Gross Domestic Product (GDP), however, the allocation is inching steadily lower, towards the two per cent mark.

In 2014-15, defence allocations, including pensions, accounted for 17.1 per cent of Central government spending, or about 2.28 per cent of the GDP. This year, the defence budget will comprise 15.5 per cent of government expenditure and just 2.04 per cent of the GDP.

In countries like India that face significant security threats, the norm is for defence spending to rise at least in tandem with GDP. Were allocations to have remained at the 2014-15 level of 2.28 per cent of GDP, the military would be getting Rs 50,640 crore more this year than it has received.

Defence budget: falling share

(In Rupees crore) 

2016-17 (Actual)
2017-18 (Actual)
2018-19 (RE)
2019-20 (BE)

Revenue allocation

Capital allocation

Pension allocation


Central government spending

Share of government spending

Gross Domestic Product (GDP)

Defence as a percentage of GDP

(Source: budget documents)

Defence spending is falling in percentage terms even though all military purchases are now subject to Goods and Services Tax (GST). For many items, such as vehicles, this is levied at the higher rates of 18 and 28 per cent.

Nor do the defence allocations cater for the addition of 100,000 more soldiers to the army over the preceding decade, which the government sanctioned to cater for the rising threat from China. Over the last dozen years, the salary bill has risen six-fold, with swelling manpower numbers compounded by the salary and pension hikes of the Sixth and Seventh Central Pay Commissions and the One Rank One Pension award of 2014-25.

Providing some relief to the military, the finance minister announced customs duty exemption for the import of defence goods. “Defence has an immediate requirement of modernisation and upgradation. This is a national priority. For this purpose, import of defence equipment that are not being manufactured in India are being exempted from the basic customs duty”, she said.

Capital allocations, which fund the purchase of new weapons and equipment for modernisation, remains at 1,08,248 crore, or just one quarter of the total defence budget. The Indian Air Force (IAF) has again been allocated the bulk of the capital budget – Rs 39,303 crore or almost 37 per cent of the total.

Yet, this is unlikely to suffice, with the IAF paying annual instalments for the Rafale fighters which will start joining the fleet this year; and for ongoing purchases of Sukhoi-30MKI and Tejas fighters and upgrades to its Mirage 2000 and Jaguar fleets.

The 1.26 million-strong army, which includes 85 per cent of the military’s manpower and is in combat round the year, has been allocated Rs 31,815 crore, or 29 per cent of the modernisation budget.

The 83,500-strong navy has been allocated Rs 25,656 crore for modernisation, or about 24 per cent of the capital budget. This includes Rs 2,500 crore for the Coast Guard. Navy planners will struggle to fund the planned purchase of six conventional submarines and a second indigenous aircraft carrier. Payments are also being made for the first indigenous carrier, INS Vikrant, which Cochin Shipyard promises to deliver by 2021.