A comparison of the latest defence budget projections by China and India reveals that the People’s Liberation Army [PLA including Navy and Air Force] are spending three times that of the Indian Armed forces while the procurement budget gap is even wider at five times. Here is a brief overview of the defence budgets of China and India.
China Defence Budget 2024
The Chinese government has proposed a defense budget of 1.67 trillion yuan ($231 billion)
for the 2024 fiscal year, a 7.2 percent year-on-year increase, according to a draft budget report submitted to the national legislature on March 05.
The proposal was distributed to members attending the second session of the 14th National People's Congress in Beijing. China Military online claimed that this will be a single-digit growth for a ninth consecutive year since 2016, and will remain the same percentage increase like that in 2023. The 2023 fiscal year had proposed a 7.2 percent year-on-year increase while the 2022 defense budget was raised by 7.1 percent.
Lou Qinjian, spokesman for the second session of the 14th NPC claimed that China has maintained a comparatively low military expenditure and the nation always sticks to a peaceful development road. "In recent years, to better safeguard our sovereignty, security, and development interest, to meet the need of military transformation with Chinese characteristics, and to better perform China's international responsibilities and obligations as a major country, China has maintained reasonable and steady growth of its defense spending, consistent with its sound and steady economic and social development, to promote synchronized growth of defense capability and economic strength," he told reporters.
A comparison with the United States was also made. "I wish to stress that compared with major military powers, such as the United States, China's defense spending is quite low, whether as a percentage of GDP or total budget, or in terms of per citizen or per service member expenditure."
Indian Defence Budget 2024-25 Trails
India’s defence allocation in turn for 2024-25 is Rs 6.21 lakh crore [Approx US $ 72 Billion] in Interim Union Budget 2024-25; 4.72% more than FY 2023-24.
Thus, the Indian allocations are approximately one third that of China with the increase being less by 3 % indicating there is a considerable gap between investments in defence by the two regional competitors which may if the same trajectory is followed grow over the years.
China on the other hand is marking up its budget with that of the United States posing a global challenge to it.
The Indian Ministry of Defence figures indicate that of the 2024-24 Defence budget 27.67% to capital, 14.82% for revenue expenditure on sustenance and operational preparedness, 30.68% for Pay and allowances, 22.72% for defence pensions and 4.11% for civil organisations under MoD.
Allocation to the Armed Forces for revenue expenditure (Other than Salary) meant for sustenance and operational commitment for FY 24-25 continues to be high at Rs 92,088 crore, which is 48% higher than the budgetary allocation of FY 2022-23.
A similar breakdown for the Chinese defence budget is not available but it is supposed that approximately 30 % defence budget is allocated for capital acquisitions almost the same in percentage terms by India which indicates that China will be spending almost $ 72 Billion on capital procurement or virtually the same as India’s total defence budget.
Of the Indian Defence Budget for 2024-25 approximately Rs 131057 Crore or $ 15.84 Billion approximately, has been allocated for different heads for procurement of aircraft, guns, ships and submarines which is approximately 76 percent of the total allocations for capital budget. Thus China is spending almost five times on procurements as India.
So What?
While it is not feasible for India to increase the defence budget or capital procurements to keep pace with that of China, the answer may be in greater efficiencies in spending. Reduction of the revenue and reallocations to the capital budget is feasible for India through downsizing which will have to be undertaken at the earliest.
Assured funding of key projects is another way out for sustaining capital acquisitions given greater visibility in programmes such as the LCA Mk 1 A and thus reducing adhoc spending at the last minute prior to closure of the Budget year which is a bane of the Indian MOD year on year. Non lapsable fund for the purpose has been proposed but this has not been seriously pursued.
Efficiency in acquisitions through effective project management is another option to build capabilties, Atma Nirbhar or otherwise to ensure that the period of acquisitions can be cut down in some cases from two decades to at least a decade or less.
This and other proposals need urgent consideration by the Indian Ministry of Defence to ensure that the gap in defence capability build up with China does not result in that in deterrence.
Ironically, China US competition could be beneficial in some respects for India along with a closer strategic partnership with the United States provided this is translated into mutually acceptable strategies to keep the PLA tied down in respective sectors – in Western Pacific and the India China land borders. China however has an advantage with a “quasi alliance,” with Pakistan.