India Military Budget Projections - 15 years 2016-30

Discussion in 'Defence & Strategic Issues' started by garg_bharat, Apr 22, 2016.

  1. garg_bharat

    garg_bharat Senior Member Senior Member

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    There are a lot of military budget projections, mostly out of tune with actual financial resources of the country.

    I have made a table with 7% annual growth which is very reasonable for long term.

    Year GDP Military budget Capital Budget
    Tril USD Bil USD Bil USD
    2016 2.3 39 11.82
    2017 2.461 41.73 12.64545455
    2018 2.63327 44.6511 13.53063636
    2019 2.817599 47.776677 14.47778091
    2020 3.014831 51.12104439 15.49122557
    2021 3.225869 54.6995175 16.57561136
    2022 3.45168 58.52848372 17.73590416
    2023 3.693297 62.62547758 18.97741745
    2024 3.951828 67.00926101 20.30583667
    2025 4.228456 71.69990928 21.72724524
    2026 4.524448 76.71890293 23.2481524
    2027 4.841159 82.08922614 24.87552307
    2028 5.180041 87.83547197 26.61680969
    2029 5.542644 93.98395501 28.47998637
    2030 5.930629 100.5628319 30.47358541

    Total 296.98

    IAF Share 40% 118.79
    Navy Share 30% 89.09
    Army Share 30% 89.09
     
    Last edited: Apr 22, 2016
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  3. garg_bharat

    garg_bharat Senior Member Senior Member

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    Army share is too low currently and should increase reflecting its primary role in the protection of the country. I expect IAF share to decrease; primarily as amount of air assets increase in the army.
     
  4. garg_bharat

    garg_bharat Senior Member Senior Member

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    I feel that a good 10% of Army and Navy budget should focus on robotic or unmanned systems, as this is the future of warfare. Similarly IAF needs to create an unmanned attack aircraft fleet which it does not have today.

    A budget of $30B should be earmarked for unmanned systems development and production.

    Navy - sub-hunters (both boats and micro-subs), drone aew helicopters, drone attack (fix wing) aircraft.
    Army - Surveillance platforms from small, medium to large, tank hunter drones
    Air Force - attack drone (may be common with navy)
     
  5. garg_bharat

    garg_bharat Senior Member Senior Member

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    Another 10% or 30B should be devoted to SAM systems - both anti-missile and anti-aircraft systems.

    Defensive systems are necessary for such a large country with lots of economic targets.

    S400 purchase for 6B is a very good offer, and should be taken up with urgency. This wilh mass production of Akash will fill most gaps. Short range SAMs should be bought in small numbers for specific needs which IAF has done in the past (SPYDER). Army can upgrade OSA and Strela systems, and can buy additional Tor systems for moving columns.

    Akash missile systems need to be deployed for naval installations as well as major economic assets; to protect against air and cruise missile attacks.

    BMD systems need to be moved to production and deployment.
     
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  6. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    Here what you forget to consider is the Rupee value against USD. Since the Rupee is highly undervalued to the factor 4, it is likely to go high very rapidly over next 15 years.

    Here is my estimate. GDP growth 7% and Rupee appreciation 5%

    year GDP TR USD Defense Budget Bn USD
    At 7% growth rate
    2016 ****** 2.3 ****** 36.50
    2017 ****** 2.58 ****** 42.16
    2018 ****** 2.9 ****** 48.69
    2019 ****** 3.26 ****** 56.24
    2020 ****** 3.66 ****** 64.96
    2021 ****** 4.11 ****** 75.03
    2022 ****** 4.62 ****** 86.66
    2023 ****** 5.19 ****** 100.09
    2024 ****** 5.83 ****** 115.6
    2025 ****** 6.55 ****** 133.52
    2026 ****** 7.36 ****** 154.22
    2027 ****** 8.27 ****** 178.12
    2028 ****** 9.29 ****** 205.73
    2029 ****** 10.44 ****** 237.62
    2030 ****** 11.73 ****** 274.45
     
    Last edited: Apr 22, 2016
  7. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    Deleted,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
     
    Last edited: Apr 22, 2016
  8. ezsasa

    ezsasa Senior Member Senior Member

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    If the new DPP 2016 works, budget may become irrelevant. We should be buying more toys even from comparatively modest budget starting two years from now.

    Budget deficit comes into play, only when we are buying foreign toys.

    Even better would be, when domestic defence companies start transacting in INR instead of USD during domestic procurement.

    My Point is, defence budget deficit(if any) can be mitigated by some policy changes,and this has already started.
     
  9. garg_bharat

    garg_bharat Senior Member Senior Member

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    IAF fighter aircraft purchases:

    Rafale - 10B (36 + additional maint/weapons)
    LCA - 15B (250-300 units with adequate purchases of weapons and spares)
    FGFA - 12B (Initial development and factory set up - 6B, Around 60 units for rest 6B)
    AMCA - 3B for development
    Make in India fighter - 22B program cost for 150 units with weapons and spares

    Total fighter cost = 62B. This represents 55% of projected 118B capital budget for IAF. If managed properly, this should give around 500 new fighters by 2030.
     
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  10. garg_bharat

    garg_bharat Senior Member Senior Member

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    We cannot use this as gradual depreciation of rupee is the historical trend, as well as Reserve Bank policy.
    We have to make a projection based on historical trend only.
     
  11. garg_bharat

    garg_bharat Senior Member Senior Member

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    The 50 ship demand of Navy (I think major combatants) cannot be met as average cost of ship is too high, with even frigate costing 1.2B USD. Such unit costs are not sustainable.

    Plus Navy needs to pay more attention to smaller ships - like mine countermeasures ships, escort frigates, and sub-hunting corvettes. The Indian Navy still needs sea going patrol ships as all duties cannot be carried out by coast guard.
     
  12. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    You wrote budget of 2016 $39 billions meanwhile it's around $50 billions.
    Here's what I got.
    https://en.m.wikipedia.org/wiki/Lis..._projected_military_expenditure_(current_US$)
     
  13. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    DO you know how chinese economy of 2 BN USD grew five fold in 10 years from 2 bn USD to 10 BN USD. The major factor was yuan appreciation and not growth. We can not be a major economy without rupee getting strong.




    http://cdn.tradingeconomics.com/cha...604220625n&d1=19160101&d2=20161231&type=stock
     
    Last edited: Apr 22, 2016
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  14. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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  15. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    In my above projection , I have projected only 5% growth . Infact INR can rise at 10% every year to reach at Rs 15 against 1 usd by 2030.
     
  16. Anupu

    Anupu Regular Member

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    But why would we want that, that would kill of the competitive edge of Indian manufacturing and more importantly Indian services, In fact it would be better if Rupee just remains stable.
     
  17. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    I am sorry. It was 2 tr USD and not 2 bn.
     
  18. Blackwater

    Blackwater Veteran Member Veteran Member

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    army budget projection has no value untill they have the worst procurement process and kale pele safari suit wale babus and their tender system:megusta::megusta::megusta::megusta:
     
  19. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    As start growing, this would be a natural outcome. Look at china and US. Bloody they can get everything very cheaply from international market. Imagine petrol available at Rs 15 or 20 a liter and computer available at Rs 5000 to 1000. Looking to our manpower, we need to emerge as the knowledge based economy and not simply manufacturing based industries. We need to produce knowledge based consultency etc.
     
  20. HariPrasad-1

    HariPrasad-1 Senior Member Senior Member

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    Read parrikar interview today. he has said so many things about procurement etc.
     
  21. Anupu

    Anupu Regular Member

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    That would mean deflation, won't happen, as healthy inflation happens when a country grows; the currency will hence become slowly weaker, which is again natural. And there is no sense in it making it stronger than empty pride.

    1yen = 0.0090 dollar ($1 = 110 yen), do you think Japanese have a weak economy. We would simple increase denominations at best, our smallest note will be Rs 100, that's it.
     

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