It’s for the new government to implement these sorely-needed reforms, and not let them remain a wish list
A new government has been put in place with a comfortable working majority to pursue progressive policies without any encumbrance. The agenda for the new government relating to the defence forces needs diligent consideration and dynamic implementation. Some critical issues that have a profound effect on the operational efficacy of the services are discussed below. At first glance, it may appear a wish list. But objectives have to be set in order to strive to achieve them.
Modernization of the Armed Forces
It is an accepted fact that modernization of our armed forces is lagging by a decade with critical gaps in equipment profile causing grave concern. Successive governments have been making adequate funds available for the procurement of new equipment but structural, procedural and policy inadequacies have been stalling their full utilization. The following would help:
• Delegation of Technical Evaluation – Currently, Acquisition Wing under the Ministry of Defence (MoD) handles the complete gamut of procurement activities. For every decision, the services have to refer cases to MoD, resulting in avoidable delays. As MoD has little to contribute to technical appraisal of competing equipment, all functions from issue of tender documents to selection of technically acceptable equipment should be transferred to Headquarters Integrated Defence Staff. But commercial evaluation and price negotiation with the successful bidder should continue to be undertaken by MoD.
• Reforms in Procurement Procedure – All procurements are required to be carried out as per the approved 15-Year Long Term Integrated Procurement Plan and 5-Year Services Capital Acquisition Plan (SCAP). SCAP for 2002-2007 had not been approved till 2007, resulting in a massive 43 per cent of the capital budget being expended on unplanned items in 2005-06! All procurement plans must be finalized well in advance and comprehensive sanctions issued at the outset, obviating the need for repeated references for piecemeal approvals. Matrix system should be introduced to select equipment that provides best performance parameters commensurate with its cost. While working out cost, life cycle costs should be considered rather than initial procurement costs which can turn out to be highly misleading in the long run.
• Offset Policy Issues – Offset threshold should be reduced to Rs 100 crore from Rs 300 crore at present (the British demand offsets for all contracts over Rs 70 crore). Similarly, offset value should be raised from 30 per cent to 100 per cent, the level accepted the world over. To promote Indian defence industry, transfer of technology should be accepted against offsets.
• Foreign Direct Investment Issues – Although the defence industry was opened to the private sector in 2001 with a cap of 26 per cent on Foreign Direct Investment (FDI), the response has been lukewarm. Prospective foreign investors find the policy highly dissuasive – they have no significant control, strict capacity/product constraints, no purchase guarantee and no open access to other markets (including exports). It is time to raise the FDI cap to 49 per cent and revisit the policy to rationalize other incongruent provisions.
• Carrying Forward of Defence Budget – Defence procurement cycles span three to five years. The current system of unexpended defence budget getting surrendered is a big impediment to long-term planning and allocation of resources. The MoD should be allowed to carry forward unexpended funds. Such a provision will also curb the current tendency of procuring unplanned items near the end of a financial year just to spend all allotted funds.
• Integration of the Private Sector – Both the public and private sectors are national assets. Whereas the public sector possesses extensive infra-structure and trained manpower, the private sector excels in technology, financial management and marketing. Therefore, entry of the private sector in the defence industry must be facilitated. Both the sectors should be treated on a par. The Department of Defence Production in the MoD should be replaced by the Department of Defence Industry.
Promotion of Jointness
The contemporary world-wide Revolution in Military Affairs (RMA) pre-supposes total tri-service integration in thought and execution. In RMA-oriented warfare, joint operations constitute the key to battlefield dominance and military superiority. Lack of jointmanship among the three services and the current mindset of segregated service-wise operations have been the bane of Indian defence preparedness.
All military commanders acknowledge the criticality of jointmanship for national security. They support it when it comes to platitudes but fight every step towards jointmanship fiercely on specious grounds. This dichotomy is due to the fact that the services guard their turf with relentless fanaticism and every jointmanship proposal has to result in a reduction of domain of each service to prevent duplication/triplication. Conservation of resources and effort is one of the primary objectives of jointmanship.
As the services continue to quibble, the government must intervene forcefully. Although decision by consensus is always the most preferred option as it creates synergy in an organization and facilitates smooth implementation, there are times in the life of every nation when hard decisions are required to be taken by the leadership. Delay or wavering can cause irreparable damage to national security interests. Should the persuasive approach fail to yield the desired consensus, the government should enforce jointmanship through decree. National interests cannot be permitted to be held hostage to the intransigence of a few dissenting military leaders.
The Kargil Committee Report suggested a number of measures which must be carried out without delay or dilution. Foremost among its recommendations is creation of the post of Chief of Defence Staff. Additionally, the Defence Intelligence Agency needs to be empowered and made more effective.
Outsourcing of Non-Core Functions
Outsourcing in its broadest sense refers to contracting out to external agencies certain services and tasks which were earlier performed with internal resources. Manpower ceilings, limited defence budgets and advent of increasingly complex military hardware are forcing world militaries to outsource non-core functions. If implemented intelligently, outsourcing can act as a force multiplier by freeing additional manpower for operational tasks.
Soldiers are trained to fight an adversary and must concentrate on their primary function. They should not be wasted on routine administrative functions, for which civilian service providers are better equipped and are more cost effective. For example, organizations like the Military Engineering Service have outlived their utility and must be disbanded. Building construction and maintenance functions can be fruitfully outsourced.
Organizational Reforms
To inject professionalism and promote jointness in the MoD, at least half the appointments at Director, Joint Secretary and Additional Secretary levels should be held by service officers. There is no reason for the Chief Administrative Officer of the MoD to be an IAS officer. Similarly, it is incongruous to have bureaucrats man all posts in the Department of Ex-Servicemen’s Welfare.
Urgent reforms are required in the Defence Research and Development Organization (DRDO). It should be made accountable for its performance through periodic external audits. As mandated, DRDO should focus only on strategic, complex and security sensitive systems. It must not waste the defence budget on unrelated activities.
On an average, 40,000 personnel are discharged from the services every year. As recommended by SCPC, close to 12,000 retiring servicemen can be laterally shifted into various civilian cadres under the MoD every year. This measure will save the considerable pension bill and provide employment to needy soldiers who retire in the prime of their lives.
With the release of the Sixth Central Pay Commission (SCPC) report, the services have come to believe that they are being downgraded and marginalized deliberately and systematically. It does not augur well for a country to have demoralized soldiers. Creeping despondency and growing discontentment must be arrested immediately. It is time their grievances are redressed and their confidence in the fairness of the government restored. (See box)
Although five years is a very short period in the life of a nation, all matters pertaining to defence have a long gestation period and take time to fructify. Therefore, it is essential that the new government gets going at the earliest without getting bogged down in bureaucratic quagmire.
Whereas the public sector possesses extensive infra-structure and trained manpower, the private sector excels in technology, financial management and marketing. Therefore, entry of the private sector in the defence industry must be facilitated
The Services Capital Acquisition Plan (SCAP) for 2002-2007 had not been approved till 2007, resulting in a massive 43 per cent of the capital budget being expended on unplanned items in 2005-06!
At least half the appointments at Director, Joint Secretary and Additional Secretary levels should be held by service officers. There is no reason for the Chief Administrative Officer of the MoD to be an IAS officer
The Pay Imbroglio
• A separate standing pay commission should be constituted for the services, as in many countries. All issues relating to pay and allowances of the services should be referred to the commission.
• The earlier status of Lieutenant General vis-à-vis Director General of Police should be restored.
• Rank-based pension should be sanctioned to help retired soldiers improve their quality of life and live their old age in dignity.
• Shortage of officers should be overcome by making Short Service Commission attractive through assured second career by lateral induction, as recommended by SCPC.
