Today South Block will usher in a revolution. The finance division of the ministry of defence is organising an international conference to discuss defence finance and economics on November 13-15 where the world’s leading experts and high-level government functionaries dealing with different aspects of this complex and apparently esoteric subject will share their experience and expertise. And every key top official dealing with our defence and its funding is slated to speak.

There is a new confidence in the country that we can sustain an average of 8 per cent economic growth in the coming years. Prime Minister Manmohan Singh is setting his sights even higher. That would indicate that this would release more funds in the future for our defence. But the reality is that competing priorities would demand more and more of national resources if economic growth has to be kept up and people’s aspirations met. This makes a scientific approach to defence finance and economics crucial and sharing experiences and ideas from experts across the world timely.

For a variety of reasons our defence spending had slumped after 1987. Our defence expenditure averaged just about 2.3 per cent of the GDP for the past 15 years compared to the 3 per cent level spent in the previous 15! Coupled with the depreciation of the rupee against foreign currencies, and the disintegration of the Soviet Union and our own economic difficulties of early 1990s, this has had a deleterious effect on our military modernisation and defence preparedness. This has begun to recoup somewhat in the past two years. So where do we go from here?

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