Dude, 2.5-3% is the sweet spot for us. A 7 trillion USD economy by 2030, spending 2.5-3% means we are spending close to 180- 210 billion USD. With purchasing power parity and local development of most of the equipment, economies of scale, and hopefully, tighter procurement timelines, can ensure efficient and cheaper pricing. 4% is not required in present scenario. 2.5-3% is good enough.
Even a nominal increase of 0.5% in defense budget doubles or even triples our capital acquisition budget.
Also, Modi government has failed to do one thing and that is doubling down on defense research.
What Modi government has done well is that it has brought incremental change that is undercut waste, undercut foreign acquisition and has made forces, ofb, drdo more prudent and has brought in private players in the picture.
But what this guy has not done is bringing pace to the change. That will happen by first of all throwing some money, doing privatisation in defense rather than making government ones more prudent (but off late Modi has gone dead silent on any sort of privatisation).
Why am I saying so? See defense is a sector that intersects various sectors from electronics to electricals, metallurgy and machinery, shipping, aerospace, engines, now even Ai and shit, communication tech etc. There is not one core sector of the industry that doesn't intersects with defense production and defense research.
Now the capacity created for defense production, technology that has been developed for defense production can easily be translated to make a robust industrial base. Now there are three hindrances here, one max production being done by government companies, which do not use that in the civilian field nor do they innovate beyond a point. Two, limited capital acquisition budget. Three, tepid increase in defense research.
Now these government companies have no incentive to innovate or do research of their own. Neither they will use the technologies and capacity they have to gain advantage in the civilian part of the spectrum in which they operate.
I am not saying that government needs to create private champions, privatise the existing ones, they will themselves become champion. (Though even without privatisation we are seeing that vendors are getting created who are doing the heavy lifting of actually doing things that are required, this can also lead to maturing of our MIC ecosystem though).
It is sad to see Modi se bhi ye nahi ho paya aur usse nahi ho paya to usse hope bhi nahi hai.
War sirf border pe nahi hai, na ek ship banam ek ship ki hai, na ek aircraft banam aircraft ki hai. Today, India is so much ahead of Pak in war not just because we have better weapons but because we have a much better domestic military industrial complex and that is because we have a much better economy.
Money that will go for defense is not going to go waste, it is going to return to the economy itself and it will not develop economy at the surface level, no, of will prop the base level of economy, the roots of the economy.
Let me explain how.
See industrial manufacturing is core part of a economy and production of raw materials as well though. Now all other sectors are build on that. If you leave out two things that have happened due to globalisation, that is remittances from our men labouring out west, or outsourcing of IT, our economy will be directly proportional to the amount of manufacturing and raw materials that we produce. This is what is the core of economy. This is what Russia has and that is why Russia bloody survived all American sanctions. All other sectors, tend to find a place in economy because there is manufacturing and raw materials productions happening. Services are either to help in these primary or secondary sectors, or they are based on serving people who have infact earned through manufacturing or serving in some sort of services that has also emnated from manufacturing.
Finance, health, are not cores and never will be. Having n number of insurances or dollar hundred insulin injections is not the core of the economy.!
So, defense research and production, will give a solid base to our manufacturing, which will help us solidify our economy's base which will truly make us a global power or vishwa guru as we say it (mostly mockingly). Our economy should not just be judged by the gdp numbers rather than by the complexity of the economy.
One more thing you should see, Piyush Goyal was showing mirror to the industry that you don't do research. See, in which sectors most of the patents are filed? Pharma, automotive, clean energy, electronics etc etc. Electronics was dead, not the biggest pharma or renewables market either, we are following the trend, not leading it. sir, our companies are not in a world leading phase, neither as a country we have excess capital. To do anything new, innovative that can happen only either if the society as a whole has generated excess capital like United States or now China and is full with energetic to dominate the globe (Low energy EU has no such dream). Or if the push comes from the top, and one of the most easiest way for that is through defense, though not just limited to this.