MILITARY BUDGETS in INDIA and PAKISTAN
Military-Budgets-India-Pakistan-Trajectories-Priorities-Risks-Oct2016.pdf
Military-Budgets-India-Pakistan-Trajectories-Priorities-Risks-Oct2016.pdf
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1995<br />
1996<br />
1997<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
2012<br />
2013<br />
2014<br />
2015<br />
USD millions, constant 2014 prices<br />
Military Budgets <strong>in</strong> India <strong>and</strong> Pakistan: Trajectories, Priorities, <strong>and</strong> Risks<br />
F<strong>in</strong>ally, domestic political factors make it highly unlikely that this trend will be reversed anytime<br />
soon.<br />
India’s defense budget is grow<strong>in</strong>g at an impressive clip, but ris<strong>in</strong>g personnel costs are<br />
crowd<strong>in</strong>g out resources for modernization. S<strong>in</strong>ce the mid-2000s, an <strong>in</strong>creas<strong>in</strong>g share of India’s<br />
defense budget has been dedicated to pensions <strong>and</strong> personnel costs, while capital outlays –<br />
<strong>in</strong>vestments <strong>in</strong> weapons systems – are decreas<strong>in</strong>g relative to the rest of the budget. Between 1995<br />
<strong>and</strong> 2015, India’s defense budget grew, on average, over 5.5 percent annually (see Figure 2). 13<br />
Draw<strong>in</strong>g on India’s impressive economic growth, the country has gone from a contested regional<br />
power to one of the preem<strong>in</strong>ent regional powers along with Ch<strong>in</strong>a <strong>and</strong> Japan. In 2015, India’s<br />
defense budget topped $51 billion, mak<strong>in</strong>g it the sixth largest <strong>in</strong> the world. 14 India’s defense<br />
spend<strong>in</strong>g accounted for three percent of <strong>in</strong>ternational defense spend<strong>in</strong>g <strong>in</strong> 2015. In contrast,<br />
India’s share was just over one percent <strong>in</strong> 1995. 15 In short, India’s military profile has never been<br />
higher.<br />
Figure 2: Grow<strong>in</strong>g Indian Defense Spend<strong>in</strong>g 16<br />
60,000<br />
3.5%<br />
50,000<br />
40,000<br />
30,000<br />
20,000<br />
10,000<br />
-<br />
3.0%<br />
2.5%<br />
2.0%<br />
1.5%<br />
1.0%<br />
0.5%<br />
0.0%<br />
Defense spend<strong>in</strong>g<br />
Defense as % of GDP<br />
13 The defense budget data were obta<strong>in</strong>ed from SIPRI, “SIPRI Military Expenditure Database,” while the<br />
<strong>in</strong>flation figures were obta<strong>in</strong>ed from IMF, “World Economic Outlook.”<br />
14 SIPRI, “Military Expenditure Database,” <strong>and</strong> IISS, “Chapter 2: Comparative Defense Statistics,” The<br />
Military Balance, 2016.<br />
15 Ibid.<br />
16 SIPRI, “Military Expenditure Database.<br />
13