No.s 39 & 40, June 2005

No.s 39 & 40
(June 2005):

Examining the Current Boom

Budget 2005-06:
III. Spending on Military and Police – No Budget Constraint

It is instructive to compare the expenditures on social services and agriculture with certain other heads of the Budget, namely, military expenditures and the police.

Table 10: Union Budget 2005-06 Military Expenditure (Rs bn)

Ministry of Defence
Defence Pensions
Air Force
Research & Devt
Capital Outlay
Total official defence budget*

* after adjusting for surplus of defence ordnance factories

Other military-related expenditure (Rs bn)
Indo-Bangla, Indo-Pak Border Works
Border Roads Development Board
Dept of Atomic Energy
Dept of Space

The official defence budget comes to Rs 969.52 billion (including pensions); to this we should add border works, border roads, and half the budgets of the Department of Atomic Energy and the Department of Space (this is admittedly a very rough measure: the former is responsible for making nuclear weapons, the latter for the missile programme, but no separate provision is made for either of those two expensive programmes). The total, the unofficial defence budget, would come to well over Rs 1,030 billion. The figure would go even higher if we add the budgets of various security forces such as the Border Security Force. We are not doing so here because we are including them in the Central expenditure on police below.

Note that the unofficial defence budget comes to nearly three per cent of the projected GDP for 2005-06, and is over 35 per cent higher than the Centre’s combined spending on all social services, agriculture and irrigation. Indeed even the official figure is about 2.7 per cent of GDP, and has risen sharply under the UPA government. The 2005-06 figure is Rs 250 billion larger (nearly 35 per cent larger) than that of two years ago. Seventy per cent of that increase is on account of hiked Capital Outlay – that is, for the purchase of weapons and technologies, largely imported.

The Centre’s expenditures on internal security are given below. (These are taken from various heads under the Home Ministry.)


Table 11: Union Budget 2005-06 Police (Rs bn)

Narcotics Control Bureau
Intelligence Bureau
Civil Defence
Home Guards
Special Protection Group
Housing for Police
Buildings for Police
Jail modernisation

* including CRPF, NSG, BSF, ITBP, CISF, Assam Rifles, SSB, Special Police, etc.


The sum of Rs 147.1 billion for internal security is larger than the budget for either Elementary Education, Rural Employment, Health and Family Welfare, or Agriculture (see Table 1 above). While state governments have primary responsibility for health and education, police too is a state subject. Indeed state governments too spend heavily on police (Rs 180.72 billion by the states in 2002-03).

One might debate whether one or the other head of expenditure named above should be considered military or internal security, but there is, of course, no clear line now between the two: the bulk of the Army is deployed within the country. Thus a proper calculation of total internal security expenditures would consist of the sums in Table 11 (Rs 147.1 billion), plus the states’ budget for the police in 2005-06 (which would be over Rs 200 billion), plus a sizeable share of the Army budget (which is Rs 312.43 billion). A guess at the total would be Rs 450 billion.

An increasingly important reason for internal unrest is poverty and lack of employment. That unrest is treated as a question of law and order; more and more forces are deployed to put it down; as a result spending on “internal security” (the security of the ruling classes) rises. There seems to be no shortage of funds for this purpose.

NEXT: Declining Productive Expenditure


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