South Asia Peace Wire

India: Steep 34% hike in defence budget - Up to $29 Billion

(The Times of India, 6 Jul 2009, 1400 hrs IST, PTI)

NEW DELHI: With an aim of fast-tracking procurement of defence equipment, the government steeply hiked the budgetary allocation for defence to Rs

1,41,703 crore, a 34% increase over the previous fiscal.

The increase in real terms amounted to Rs 36,103 crore over last year's allocation of Rs 1,05,600 crore, and is apparently intended to speed up procurement of defence equipment and plug the security gaps exposed by the November 26 Mumbai terror attacks last year.

The 34% increase is substantial compared to the increase of only 10% effected in last year's budget
over Rs 96,000 crore allocated in 2007-08.

In fact, Finance Minister Pranab Mukherjee had allocated the same amount for defence in his interim budget presented in Parliament on February 16 before the Lok Sabha polls.

Despite the hike this year, India's defence spending is still at about 2% of the GDP, compared to China's 7% and Pakistan's 5%.

The defence ministry had returned nearly Rs 7,000 crore as unspent money
from its last year's capital outlay of Rs 48,007 crore as its plans to procure light utility helicopters and 155mm artillery guns did not fructify.

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India Boosts Defense Spending To About $29 Billion

(http://www.easybourse.com/ July 6th, 2009 / 11h58)

NEW DELHI (AFP)--India on Monday confirmed a huge increase in military spending and offered sweeping benefits to the police, linking the ongoing drive to ramp up national security to economic development.
Finance Minister Pranab Mukherjee hiked the defense budget for the financial year to March 2010 by 24% to INR1.42 trillion (about $29 billion) to partly fund a program to modernize India's 1.23-million-strong military.
The size of the increase had been flagged in a pre-election interim budget in February.
An attack by Islamist militants in Mumbai in November that left 166 people dead also prompted Mukherjee to grant additional funds for the paramilitary and state police.
New Delhi blamed "official agencies" in Pakistan for the carnage in Mumbai, but conceded the 10 militants who came undetected by the sea took advantage of India's antiquated maritime security and gaps in intelligence networks.
In addition to the defense budget, Mukherjee sanctioned an additional $143 million for the paramilitary and said he will also spend $456 million more to strengthen border security during the current fiscal year.
"Significant augmentation in the strength of the paramilitary forces is being done," Mukherjee said, adding the government will build 100,000 houses for personnel to "boost morale."
In a bid to stem discontent of retired soldiers from spilling into the ranks, he promised an attractive pension program for 1.2 million ex-military personnel, some of whom in recent months had taken their agitation to the streets.
Prime Minister Manmohan Singh said the security modernization program was crucial to the unhindered development of Asia's third-largest economy.
"Law and order is a prerequisite to sustainable development...so the modernization of our intelligence is a must," Singh told Doordarshan national television.
India's army is clamoring for helicopters, artillery, armor and infantry, while the air force is on the verge of buying 126 war jets worth almost $12 billion and the navy wants an aircraft carrier.
India, which is the biggest weapons buyer among emerging countries and has imported military hardware worth $28 billion since 2000, plans to sign further contracts estimated at up to $30 billion in the next few years.
However, strategy expert Uday Bhaskar noted the lion's share of the funds will be taken up by wages and pensions, and said: "The current defense allocation may look good, but it will not enhance the capability of the military in any way."
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=kIGIVmK5g1WYtJjPYh4z8g%3D%3D. You can use this link on the day this article is published and the following day.
Monday July 6th, 2009 / 11h58     Source : Dowjones Business News

[Published in: The Telegraph (Calcutta), 18 August 2008]

Inflation and Morals:
- The answer to inflation is to cut down defence spending

by Ashok Mitra

Please have a heart; to ask a government wedded to the philosophy of the free market to discipline the demon of rising prices would be no less than cruelty. Inflation opens a floodgate of opportunities for producers and traders. A time lag exists between the production of a commodity and its sale. If prices shoot up during this interval, the producer makes a windfall profit in addition to the normal profit he already had borne in mind in his calculations. Given the gap of time between the purchase of stocks and their actual sales, the trader too experiences a windfall gain if market prices shoot up meanwhile. Free market economics ordains non-interference on the part of the government with happenings in the market. The continuing process of inflation helps producers and traders to keep making windfall profits. They should be allowed to do so, admonishes the doctrine of laissez-faire, the government must look the other way.

Such, then, is the crux of the matter. Inflation in the country, as measured by movements in the wholesale price index, is currently spilling beyond the rate of 12 per cent; in terms of the retail price index, it must be even higher. The government, given its commitment to neo-liberalism, can only watch the situation. It watches the situation with complacence for another, more intimate reason. The producers and the traders who are gathering in the profits are its classmates; their support sustains the government.

True, there is the other point of view. Whatever its class interests, the government functions within a democratic framework and will have to face the electorate soon. The overwhelming majority of the electorate consists of the poor and middle classes who are the severest victims of inflation. They could very well turn away from the parties constituting the government in case the wounds inflicted by rising prices become intolerable. Should not the government, for dear life, do something to save itself from the wrath of the people? For instance, could it not arrange to supply, through the public distribution system, essential commodities at a subsidy to the less fortunate sections? No, it could not; the proposal would be immediately shot down by decision-makers who shape and guide the destiny of the government. It is all very simple. Subsidized supply of commodities would adversely affect money-making by producers and traders; demand gets diverted from the free market to the public distribution system. That is as good as sabotaging the free market. The government, therefore, makes up its mind; it would not expand — on the contrary, it would phase out — the practice of supplying essential goods at subsidized prices.

There is a more basic reason why votaries of free market economics disfavour subsidies. Subsidies involve extra outlays on the part of the government. Such additional spending calls for additional taxation, the main burden of which supposedly falls on the traders and producers who rake up the profits engineered by inflation. Once more, class interests emerge as the issue. That part, the government, the free market doctrine says, is an evil; by its very existence, it stifles the freedom of individuals. This evil should not be allowed to extend its sphere of activities beyond defence and the maintenance of law and order. Offering subsidies belongs to this category of forbidden expenditure.

There is always an exception to the rule. Free marketeers do not mind increases in government expenditure if it is for defence spending. They would also not protest against the government laying out extra money on an extravagant scale for supposedly ensuring greater security for the nation, more specifically, for its leaders.

One further argument posted by those opposing subsidies is that these often lead to an excess of public spending over the government’s aggregate income. The inevitable sequel is again inflation, since too much money allegedly chases too few goods. Somewhat breathlessly, the conclusion is then drawn: any attempt to contain inflation via subsidies is self-defeating, it would only feed into inflation. Such simplistic logic will scandalize the followers of John Maynard Keynes, who had proved most effectively how a skilful deployment of deficit financing ensures gushing increases in income and employment and does not cause inflation. But Keynesians are now in the doghouse and the orthodoxy of balanced budget is back as king.

A timid soul might still offer a suggestion at this juncture: by all means have a balanced budget, but why not cut back on defence spending and use the savings to provide subsidies that could quell inflation? The timid soul, the chances are high, would immediately be dubbed an enemy of the country. Members of parliament will debate for hours on end the wisdom of according farmers an additional fertilizer subsidy of a thousand crore rupees; they will pass without discussion a 30,000-crore hike in the defence budget.

Better admit the nitty-gritty of reality: inflation is one of the corollaries of a free market existence. It widens the scope of profit-making. The higher the level of profit enjoyed by the top brackets in society, the greater is deemed to be the success of the liberal experiment, never mind what it does to the majority of the nation. There is, of course, a flip side to it. While the nation’s majority might feel helpless for a while, being at the receiving end of the maulings caused by inflation, this helplessness could gradually give rise to resentment and anger; this could have repercussions on the ballot box.

That bridge will be crossed, it will be said, when the government arrives there. A caste-, clan-, ethnicity-divided electorate can be expected to produce a caste-, clan-, ethnicity-divided parliament. In that event, it might well be possible to manoeuvre a majority support and come back to governance. Traders and producers, currently having it so good thanks to inflation, could then prove to be a most effective deus ex machina.

Inevitably, a moral will be sought to be drawn. Inflation and absence of subsidies do not necessarily topple a government. The not-so-ancient history of the collapse of the Soviet Union might be alluded to as a counter-point: the Soviet authorities subsidized about everything, from childcare to house rent to opera tickets, and yet failed to defeat destiny.

But is not a wrong reason being adduced here for the collapse of the Soviet Union? Its population enjoyed the bliss of comprehensive social welfare measures. Yes, the shadow nonetheless fell. Most of the population yearned for the richer, more luxurious things in life; which the State was unable to provide. Budgetary constraints stood in the way. A middle-income country’s leaders had vaulting ambition, they wanted to match the United States of America in military prowess, including in the arena of nuclear capability. The strain was too much on the country’s resources; the better things in life had to be denied to the populace. The disappointed people turned their backs on the leaders — and on their party.

If there is a lesson from the Soviet catastrophe, it is for reining in defence expenditure and spending what is saved thereby to provide the people with the kind of things they badly want. That moral should stand all countries in good stead and in all seasons, including in the season of inflation.

Roti [Bread] or killing machines?

by Dr Farrukh Saleem
[Published in: The News, May 04, 2008]

Imagine; one out of every two Pakistanis is short on food. Imagine; one out of every two Pakistanis is food-insecure. Imagine; one out of every two Pakistanis is managing to subsist on less than 2,350 calories per day. In March 2007, there were 60 million Pakistanis short on food. That number now stands at 77 million; a 28 percent increase in just one year.

According to the World Food Programme (WFP), over the past year, "food prices in Pakistan have risen at least 35 percent, whereas the minimum wage has risen by just 18 percent, leading to a nearly 50 percent decline in the purchasing power of Pakistan's poor…" On March 27, the World Bank warned that "Pakistan must take immediate action to prevent its economy from collapse" and that "painful adjustments" would be needed to prevent a crisis.

All right, one out of every two Pakistanis is going hungry and what do we do. We go out and buy killing machines. Imagine, over the past five years our decision-makers have bought killing machines worth $4.55 billion from the US alone.

All right, Pakistan is now officially more water-stressed than is Ethiopia.

What have we done about it? Well, we have bought 500 AMRAAM air-to-air missiles, 1,450 two-thousand-pound bombs, 500 JDAM bomb tail kits and 1,600 Enhanced Paveway laser-guided bomb kits. The bill: $667 million entirely paid with Pakistani national funds.

All right, UNICEF says that 200,000 Pakistani children die annually because of unsafe drinking water--dysentery, diarrhoea, typhoid, and gastroenteritis. What do we do? We go out and buy 60 midlife update kits for F-16A/B combat aircraft. Total value: $891 million (of which $108 million was paid by the US under its Foreign Military Financing).

All right, we haven't built a major dam in 27 years but we have paid out a colossal $1.43 billion for 18 new F-16C/D Block 50/52 combat aircraft with an option to buy 18 more. Not just that, we have already transferred $298 million to the US treasury for a hundred Harpoon anti-ship missiles (of which 70 have been delivered) and $95 million for 500 Sidewinder air-to-air missiles (of which 300 have been delivered).

What is the US up to? They have provided us $1.6 billion in Foreign Military Financing when they know very well that we actually need food for our undernourished citizenry and clean drinking water for our children.

According to the Pakistan Water Gateway, within the next 15 years at least "one out of every three Pakistanis will face critical shortages of water threatening their very survival." And, how are we preparing for that eventuality? Well, we have four Agosta 90B and three Agosta 70 class submarines. To be certain, an Agosta 90B has a crew of 36 plus five officers, so in effect 164 of our brother Pakistanis will be safe.

According to Gallup Pakistan, "Sixty-six percent of a national sample of respondents from the rural and urban areas of all four provinces say they have lately faced difficulties in obtaining atta (flour) for their daily food consumption." What do we do? We go out and buy six AN/TPS-77 surveillance radars for a cool $100 million.

Roti or killing machines? The story doesn't end at $4.55 billion going into the U.S. treasury. Now we are looking at buying Class 214 submarines from Germany's Howaldtswerke-Deutsche Werft, or is it France's Direction des Constructions Navales Services. Our new big-ticket idea will cost us Euro1.2 billion.

Roti or killing machines? Imagine; the Islamic Republic routinely submerges into absolute darkness of the Dark Ages while our Muslim leaders contemplate buying ultramodern Class 214 submarines featuring air-independent propulsion using polymer electrolyte module hydrogen fuel cells. Imagine; no roti, no pani, no bijli [No bread, No Water]--and no justice. But, proud to be the 11th largest arms importer on the face of the planet.

Tags: DefenceSpending, Pakistan, Food Crisis

LETTER TO THE PRIME MINISTER OF INDIA


5 March 2007
 
 
Dr. Manmohan Singh
Prime Minister of India
 
Dear Prime Minister,

Neglect of Children Under Six in the Union Budget 2007-8
 
We are writing to express our deep concern about the neglect of children under six in the Union Budget
2007-8.
 
You may remember meeting some of us on 19 December 2006 (just after “Bal Adhikar Samvad”), when we discussed the FOCUS Report, the rights of children under six, and the recent Supreme Court judgement on ICDS.  At that time you had assured us that the UPA Government was committed to the universalization of ICDS, as stated in the Common Minimum Programme (CMP), and also to the implementation of the Supreme Court judgement.  We are, therefore, startled and dismayed that this commitment is not reflected at all in the Union Budget 2007-8.  The allocation for ICDS (Rs 4,761 crores) has barely increased in real terms, and is virtually unchanged as a proportion of GDP.
 
It is a mystery to us how the CMP commitment and Supreme Court judgement can possibly be implemented within such meagre budget allocations.  The Supreme Court judgement requires an increase in the number of Anganwadis from the present 9.4 lakhs to 14 lakhs at the very least by December 2008.  Higher allocations are also required to enhance the quality of ICDS services.  Based on fairly conservative calculations of the requirements of “universalization with quality”, the National Advisory Council had recommended (in November 2004) an allocation of at least Rs 9,600 crores for ICDS in 2007-8.  This figure needs upward revision in the light of the Supreme Court judgement, yet the actual provision in the Union Budget 2007-8 is not even half of this conservative estimate.
 
As per this Budget, the Government of India will be spending less than Rs 5,000 crores this year on children under six, who represent more than 15 per cent of India’s population.  This compares with Rs 96,000 crores to be spent on “defence”.  This is a staggering and unacceptable imbalance in Budget priorities.  The contrast is all the more shocking at a time of growing evidence (particularly from the National Family Health Survey) that there has been no substantial improvement in infant and young child nutrition, including optimal breastfeeding practices, during the last eight years, in spite of runaway economic growth.
 
We urge you to intervene and ensure a fairer deal for children in the Union Budget 2007-8 as well as in the 11th Plan.  We also take this opportunity to reiterate our appeal for more active political leadership on children’s issues, including the universalization of ICDS.
 
Yours Sincerely,
 
                                  
  Jean Dreze        N.C.Saxena Shantha Sinha  Aruna Roy
  (Allahabad University)        (former Secretary, (M.V.Foundation) (National Campaign for
     Planning Commission)                         People’s Right to Information)
                           
Kavita Srivastava Harsh Mander   Vandana Prasad     Arun Gupta
(People’s Union  (Centre for Equity                (Jan Swasthya Abhiyan)     (Breastfeeding Promotion 
for Civil Liberties) Studies)           Network of India)
              
       Annie Raja                        Veena Shatrugna  Sudha Sundararaman            
      (National Federation               (National Institute                     (All India Democratic                       
       For Indian Women)                 of Nutrition)                   Women’s Association)         
 
 
 
 
cc: Mrs. Sonia Gandhi (Chairperson, UPA),     Shri P. Chidambaram (Finance Minister),
     Dr. Montek S. Ahluwalia (Deputy Chairman, Planning Commission)

India Pakistan Arms Race and Militarisation Watch
Compilation (February 28, 2007)
Year Seven, No 168
URL: http://groups.yahoo.com/group/IPARMW/
produced by South Asia Citizens Web and South Asians Against Nukes

---------------------------------------------------------------------------------------
Table of Contents:
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1 Eminent Jurists Begin Probe into Counter-Terrorism Laws in South Asia
2 India: So-called Anti-Terrorist Laws are Tools of State Terrorism
3 Pakistan: Militarisation of politics
4 War in Afghanistan and Pakistan
5 Pakistan: Sources of illegal weapons are all too well known to need investigation
6 India: Guns for pleasure, anyone?
7 Pakistan: New policy on military lands
8 Pakistan and India’s mad fantasy of keeping nuclear weapons free from risk:
- Nuclear accord designed to promote ‘stable’ environment
9 India and Pakistan’s tit for tat missile race:
- Pakistan military tests missile - Hatf VI missile test
- Pakistan test fires long-range ballistic missile
- India tests Brahmos Missile in February 2007
- India Plans 2nd ABM Test in June [2007]
10 India – Pakistan - Defence Spending:
- Big rise in Indian defence budget
- India hikes defence budget to Rs 96000 cr
- Hike in unproductive expenditure
11 The "disappeared" in Pakistan and India:
- Pakistani "disappeared" a growing problem: group
- Democracy disappears with persons who ‘disappear’
- Kashmir Solidarity Committee and APDP Hold protest Rally in Delhi
- Kashmir’s big lie
- India: Investigate All ‘Disappearances’ in Kashmir
- India: Government Should Act to Stop Murders in Custody
- Rogues in Khaki - Justice cannot be delivered on pick and choose basis
- Indian anti-terrorism troops accused of executing civilians
- Criminals in combat fatigues
- FIRs expose Army's hand in civilian killings
- Another body exhumed in Kashmir
- Body of carpenter killed in "encounter" exhumed
12 Siachen Madness or Mountain Peace
13 Victims of War on Terror in India and Pakistan:
- Trial and terror
- Voices of The Internally Displaced: Jammu & Kashmir
- Too many dubious convictions in Pakistan, say activists
14 Manipur and the Struggle Against AFPSA
- Manipur: The Irom Sharmila saga
15 Fire Bombing of Samjhauta Express :
- Peace and The Burning Train
- Samjhota Explosion
- Put The Joint Mechanism To Work
16 Arms Sales To The Region - Plans and The Players:
- Pakistan gets eight attack helicopters
- Russia Works To Remain India’s Top Supplier
- Aviation firms descend on India air show
- Reports: India plans aerospace military command to oversee space-based assets
- "Work on nuke deterrence for Navy underway"
- India sets sights on cruise missile market

FULL TEXT AT:
http://www.sacw.net/peace/IPARMW168.pdf