Tuesday, May 27, 2014

Need to Clean Up the Augean Stables of Defence Acquisition

Radhakrishna Rao, 
Visiting Fellow, VIF

The commitment of the Narendra Modi Government to the ushering in of self-reliance in India’s defence sector, which under the ten years long, lack lustre UPA(United Progressive Alliance) dispensation had got enmeshed in corruption, bureaucratic indecision, tardy and questionable acquisition process as well as scams and scandals of staggering proportions, should be the right starting point for initiating the process of building a vibrant Indian military industrial complex which will not only meet all the needs of Indian defence forces but also transform India into a major player in the global defence hardware market place. That today India, an emerging technological power with a globally recognised resurgent IT and software services industry, is the largest importer of arms and ammunition, only goes to show that there is something seriously and fundamentally wrong with the defence production scenario of the country.

Indeed, the complex systemic problems associated with India’s defence production matrix need to be fixed immediately. Since the shocking eruption of the Bofors scandal in mid-1980s, that stirred a big political storm in the country, the entire defence procurement mechanism of the country came under the spell of “lethargy, indecision and delay ” with serious consequences for the combat readiness of the Indian defence forces. In fact, the defence procurement procedure of the country is yet to come out of the “Bofors syndrome”. What’s more, over the last one decade or so, the defence procurement in the country became synonymous with ‘scams and scandals’ involving shady middle men keen on promoting a culture of “corruption, kickbacks and impropriety”. In the national interest, the kind of political and bureaucratic support these middle men received need to be probed thoroughly. The consequent loss caused to the national exchequer on this score is simply mind-boggling and phenomenal. On the other hand, it has gone to sully the the country’s fair image and caused enormous damage to the efforts towards defence self reliance.

The cancellation early this year of the US$770- million deal for acquiring 12 VVIP helicopters from Anglo-Italian enterprise Agusta Westland without blacklisting the vendor following the exposure of the massive kick back has shocked the Indian defence set up as never before. But as has been the case with most other defence scams and scandals that preceded the Agusta Westland episode, the middle men responsible for “corruption, string-pulling and impropriety” will go unpunished. It is here that the new ruling dispensation should blaze a trail by bringing the guilty to the book that would ultimately act as a deterrent for the recurrence and repetition of such “despicable phenomenon” associated with defence procurement. At the end of the day, self reliance in defence production could alone prove effective in putting behind all the negative features including scams and scandals associated with defence equipment import.

Not surprisingly then there is a growing demand to investigate the silence and indifference of the former Defence Minister A K Antony towards rampant corruption and shocking acts of impropriety in India’s defence acquisition. For as Defence Minister Antony had a constitutional obligation to ensure total transparency and rectitude in the defence procurement programme of the country involving massive financial outlays. This is an area where Antony did fail miserably and shockingly. Of course, Antony’s clean image and integrity has never been in doubt. But that he could do very little to stem the rot of corruption, kickbacks and wrong doings associated with the defence procurement hardware which left the defence ministry in shambles and defence forces without many of the vital fighting equipment is now a part of the history. No wonder, there is a growing clamour for probing the glaring failure of Antony to protect national interests and his conspicuous inaction in so far of bringing the guilty to book was concerned.

According to the public audit watch dog, PAC (Public Accounts Committee), the defence procurement systems and procedures that existed at the time of approving various contracts pertaining to the Ordnance Factory Project at Nalanda were beset with glaring loopholes and lacunae to the serious detriment of national interest. Rightly and appropriately, the PAC headed by M.M.Joshi has warned that “without remedial measures, future defence procurements would continue to be clogged with omissions and commissions leading to the scams to the grave peril of the nation”. About the Nalanda Ordnance Factory project, the PAC said that the it was perturbed to note that Ministry of Defence did not try to prevent the recurrence of acts of omission and commission committed in defence procurements causing huge and recurring but avoidable loss to the public exchequer. Of course, the contract with Israel Military Industries (IMI) for Ordnance Factory Project was subsequently terminated.

A the end of the day, Antony’s keenness to promote transparency and end corruption in defence procurement only contributed to the black listing of overseas vendors with serious consequences for the acquisition of defence hardware. To compound the already complicated situation, the obsession of the UPA-II to rush through a series of ” unproductive populist schemes” whose benefits could hardly reach the targeted population, implied that the budgetary provision for the purchase of defence hardware came down by a substantial extent. While the Finance Commission has been in favour of a defence budget to the extent of 3% of the GDP (Gross Domestic Product), the budgetary outlay for defence is now less than 2% of the GDP. In distinct contrast, China has already hinted that it would boost its current annual defence budget by more than 10% with immediate effect. The political dispensation in New Delhi should look at the issue of the budgetary outlay for the defence sector to sustain and support India’s defence preparedness in the context of the extremely disturbed security environment in India’s immediate neighbourhood.

Delay, indecision and lack of clarity in defence procurement have gone to seriously erode the combat fitness of the services. For instance, even as Indian Air Force( IAF) continues to be handicapped by the problem of squadron depletion, the deal to acquire 126 Rafale fighter from France could never be finalised even two years after the aircraft emerged a winner in the closely contested Medium Multi Role Combat Aircraft( MMRCA) tender. Incidentally, while IAF has sufficient number of heavier Su-30 MKI combat aircraft and the lighter Mirage-2000 and Mig-21 Bis in its fleet, it is lacking in medium range multi- role fighters.

Similarly, the Indian Navy which has an ambitious plan to position itself as a blue water maritime force, is seriously handicapped by the depletion of its under water arm .It is decades since the Indian Government gave its nod for a long term submarine construction programme under Project 75 involving the building of 24 submarines in India. However, only six are now being taken up for construction at the Mumbai based state owned Mazagaon docks. And the plan to build six more subs with advanced Air Independent Propulsion (AIP) is awaiting clearance from the government. This will enable the submarines to stay submerged for longer periods of time. Currently, none of the submarines in service with the Indian Navy has an AIP system on its board. ”The submarine construction plan has to come back on the priority list. Also our dependence on Russia should come down as the Russians have a weak and corrupt supply system” says former Navy Chief Admiral Arun Prakash. The new ruling dispensation in New Delhi should immediately review the need for strengthening the submarine fleet of the Indian Navy followed by a time bound action to strengthen the undersea arm of the Navy which happens to be the youngest of the three services.

Similarly, the proposal for the acquisition of 197 light observation helicopters for the Indian defence forces, which was taken up more than a decade back need to be given a practical shape without a loss of time. And the Indian Navy’s plan to acquire 16 multi role helicopters has been in limbo for more than a decade now. About the artillery acquisition programme of the Indian Army, the less said the better. Ever since allegations surrounding the Bofors deal came to the fore, India has not bought a single artillery piece for its armed forces. The Indian Government should fast track the acquisition of various types of artillery systems projected by the Indian Army to boost its fighting fitness. Beyond this, in the immediate future, there should be a serious study and evaluation of various proposals for the acquisition of defence hardware that are already in pipeline.

Simultaneously, the indigenous production of defence equipment should receive the top most priority. Some of the concrete steps could be ending the state monopoly over the defence production, incentivising and encouraging the Indian private enterprises to participate in defence production, creating conditions conducive for the foreign defence companies to invest in India so that Indian partner companies will be in a position to acquire latest genre technologies as well as the skill for precision manufacturing. However, for the private industrial outfits in India to become a part of the defence production scenario, there is a need for the Government to ensure that the entire exercise will be an economically viable option for the participating industries. Similarly, the Defence and Research Development Organisation (DRDO) should be directed to focus on high end research and development by stripping it of any role in system production. It is here that increased industry participation would help DRDO concentrate on research and development. Further, services should be mandated to actively participate in research and development activities of DRDO for the development of technologies that are well suited for ground level operations. Before taking up the development of any fighting equipment, the services should be made to commit on buying them.

Meanwhile, there is a feeling that from the strategic viewpoint, it would be a good idea to have a tri service commander who will serve as a bridge between the three services for the efficient and effective use and coordination of resources and expertise at every stage of joint operations. Indeed, the ambitious plan for mountain strike corps meant to take on Chinese threat, seems to be in need of rigorous, tri service evaluation to check whether China could be deterred through alternative means including the blockade in the vulnerable Malacca Strait or a tactical missile strike in Tibet. Indeed, this aspect should receive proper and immediate attention from the new Indian Government. More importantly, without succumbing to pressure from any quarter, the political dispensation in New Delhi should hasten the process of giving a green signal to the creation of a tri service aerospace command that could also draw on the resources of DRDO and ISRO (Indian Space Research Organisation).

There is now all round recognition of the ground reality that gaping holes in India’s defence preparedness could prove catastrophic in the context of China forging ahead with massive augmentation of its combat capability in all its manifestations. The indifference, ineptitude and decision gird-lock that marked the functioning of the UPA-II government has proved to be a major stumbling block in India’s military modernization programme supported by a technological upgradation process. A new national security agenda taking into account the external threat as well as internal terror and insurgency should be put in place immediately and given a practical shape without any further loss of time.

As it is, the 1.13-million strong Indian Army, considered the third largest in the world, has pitched in with a blue print of a massive investment to overcome the slippages and shortcomings of critical nature. The Indian Army Chief General Bikram Singh has already made it clear that his top most priority is to hon and fine tune the army’s “operational readiness” through a rigorous modernization process. Not to be left behind, both the Indian Navy and IAF need to address the problems of deficiencies and shortcomings on both tactical and strategic fronts to stay at the winning edge of the battlefield.

According to Defence analyst Brig (Rtd) Rahul Bhonsle, “the new government should address the systemic inadequacies and archaic procedures of doing business within the armed forces as well as with the Ministry of Defence, DRDO et.al, increase the defence budget for acquisitions and establish a genuine level playing field for private sector participation”.

Cleaning up the mess, cobwebs and dirt surrounding the defence procurement procedure should be the top most priority of the Narendra Modi led Government. Of course, this should be followed by vigorous and multi faceted efforts to acquire self reliance in all aspects of defence research development and production by exploiting the synergy cutting across the of public-private sector jurisdictional boundaries and exploiting the expertise and resources available in the research and academic institutions spread across the country. More importantly, services should be asked to play a proactive role in the indigenous development of products and systems. Services should be told in no uncertain terms that there is always a home grown alternative to the “glitzy fighting equipment” touted around in the global defence market. Of course, the path of indigenous development is strewn with problems and challenges. And India which has sent a probe to Mars and successfully developed and flight tested a cryogenic fuel driven launch vehicle has the expertise, resources and talent to create a self reliant base for defence production. What was so far lacking was the political commitment which the new government can chip in without any hesitation.


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