The importance of defence forces being adequately equipped cannot be overemphasized and most countries recognize this. British Prime Minister Gordon Brown appeared before a special inquiry about troops in Afghanistan and Iraq being underfunded. The shortage of helicopters and the inadequacy of anti-mine vehicles prompted former Chief of General Staff, Gen Richard Danatt to go public over severe problems of morale resulting from troops not being provided the wherewithal to fight. In the past, the former Indian Navy Chief, Admiral VS Shekhawat, and the former Army Chief, Gen Shankar Roychoudhury, had stated that operational readiness was being undermined by paucity of funds. At the start of the Kargil war, Gen Ved Malik famously said: “We will fight with what we have.”
Last month, the Northern Army Commander, Lt Gen BS Jaswal, told The Hindustan Times that the Indian Army was far behind in infrastructural development vis-a-vis the Chinese PLA – of the 27 projects, only six had been commissioned. He did not have to explain how lack of connectivity and absence of forward bases could degrade operational capacities. Unfortunately, there is no follow-up by the military chiefs of their statements of deficiencies – and neither by the services, nor by the government. The Kargil report never investigated why the Army inventory was underprovisioned to face the challenge across the LoC. No Prime Minister or any Minister explained why troops were not equipped for battle.
The government has corrected the ratio between revenue and capital expenditure, progressively providing more funding for modernization, but no one has seriously enquired why money has been returned unspent to the Treasury over the last 15 years, amounting to more than Rs 50,000 crore. On an average, Rs 5000 crore and more flows back to correct the government’s fiscal deficit. Predictably, the Finance Ministry orders the MoD to return the unspent amount at the time of the Revised Estimate for the following year’s Budget. The proposal of the NDA government to merge the unspent money in a rotating defence fund was abrogated by the UPA government.
The annual ritual of the Finance Minister’s budgetary allocation speech is accompanied by the patriotic two-liner: “recognizing the sacrifice of jawans, more funds will be provided if required”. The Defence Minister has commenced the charade of periodically announcing streamlining of defence acquisitions through updating the Defence Procurement Procedure. All that has been done is institution of annual revision of DPP instead of every two years.
A recent CII-sponsored report slammed the MoD for a variety of deficiencies in strategic policy, saying defence spending was not buying the quality of security required. It pointed out that by 2022, India will invest Rs 450,000 crore in internal and external security. Roughly $100 billion will go towards weapons acquisition while a similar sum will be spent on homeland security by 2016. The report records that foreign sellers take away about 70 per cent of the proceeds, the private sector receives 14 per cent while the remainder goes to the eight Defence Public Sector Undertakings (DPSUs) and 40 Ordnance Factories (OF). It points to a drawback in Foreign Direct Investment regulations, capped at 26 per cent, when only an increase of up to 49 per cent will attract foreign investment.
Year after year, the strategic lacunae in defence planning are pointed out but there is no rectification campaign. The reports of the Parliamentary Committee on Defence and other committees are ignored. No strategic visualization of India’s regional power reach and potential for global outreach exists; and if it does, it is inside closed minds. Each service makes a grand plan; on paper there is also a tri-service plan. But all these ideas are bereft of higher political direction. The government does not state whether armed forces are to be ready for one, or two or maybe one-and-a-half front war; a limited war under a nuclear overhang; or that its main challenge is asymmetrical war. The services therefore make assumptions on priority of threats and challenges, and plan accordingly.
Without strategic vision, a political focus and tri-service structures with a Chief of Defence Staff overseeing them, the Long Term Integrated Perspective Plan (LTIPP) is an aggregate of three service plans juggling with weapon systems rather than creating specific operational capabilities. The share of defence allocation is also fixed and leaves little room for any strategic switchover of capabilities.
The Defence Plan 2007-12 was not cleared by the government so the new LTIPP (2012-27) will factor in the recast Eleventh Five-Year Plan ending 2012. The government, needless to say, will merely look at it without providing any fiscal commitment.
Modernization plans never work to forecast for several reasons. Dogged by the Tehelka episode and the paranoia of the three Cs – CBI, CVC and CAG – y ou need a Richard the Lionheart to push the saint-hearted. On top of this is politics, which is hurting defence modernization. Late last year, the Vice-Chief of Air Staff, Air Marshal PK Barbora, told an international conference that political parties use defence procurement deals to settle political vendetta. “Internal politics is such that whenever defence requirements are cleared by government they are opposed by opposition parties and the same happens when roles change and opposition sits in government.”
MoD blacklisting of foreign arms companies is further choking defence procurement. Not one artillery gun has been acquired since the dreaded Bofors in 1987 whose ghost has spiked companies like Denel, Israeli Military Industry, Singapore Technologies, Kinetic and Thales of France in fielding their guns for trials. In Britain, a committee headed by Bernard Grey has sought sweeping reforms in acquisitions, recommending that the leitmotif change from obsessive procedure and probity to one of timely operational deliverance. The report has been accepted and Grey has been asked to oversee its implementation.
Another lacuna is incompetence of the contract-making department in the MoD. Defence contracts are poorly framed due to shortage of legal experts in the defence acquisition system which falls under the purview of 13 different agencies while a contract is signed and four others to oversee its implementation.
Many say the Defence Research and Development Organization (DRDO) is a big cog in the wheel of modernization. Given the history of time and cost overruns – euphemisms for non-performance – the government must take a strategic decision over its thrust and direction. The fate of the Arjun tanks, LCA, Cauvery engine and other non-materializing projects makes faith in DRDO minimal. As for self-reliance, 70 per cent of military equipment is still imported. DRDO has a huge empire of 51 laboratories and ancillaries and is too diffused. The P Rama Rao panel to revamp DRDO has suggested several reforms and restructuring, advocating focus on a dozen or so critical technologies of strategic value and discarding of ventures like making mosquito repellents, solar panels and juices.
There are a host of other reports on the MoD table – from K Subrahmanyam, Vinod Mishra and Jeevan Committee. These need to be examined and implemented as India moves on the fast track towards a high rate of growth in the face of daunting internal and external security challenges.
In the next five years, defence contracts worth $30 billion and more will be negotiated. Direct capital acquisition between 1999 and 2004 was Rs 62,700 crore and has doubled in the past five years, ending 2009. The MoD inked as many as 465 arms contracts worth Rs 135,000 crore over the last three years. It is quite an achievement, given the self-created bottlenecks.
A trend gaining favour is charting the foreign military sales route, which – being government to government – bypasses private arms sellers. The US has entered the Indian defence market in a big way though Russia is the vintage supplier as India’s armed forces have a 70 per cent reliance on Russian equipment. The US lobby and American influence will be a key factor in eroding Russia’s monopoly as the number one seller of military hardware. Till 2002, India purchased just 12 weapon-locating radars worth $192 million after 20 years of negotiation. Between 2006 and now, after the India-US Civil Nuclear Agreement, contracts worth $3 billion are in the pipeline.
American influence is also seen behind the MoD’s scrapping of the $1 billion contract for 197 Eurocopters and $1.5 billion project for six Airbus-330 MRTT mid-air refuelling aircraft. The $10.4 billion contract for 126 MRCA is to be signed later this year. It should not come as a surprise if India’s defence diplomacy strikes a strategic balance – dividing the contract between the US and Russia.
With so much going on, it is high time India undertook serious reform to overhaul the defence planning budgetary and acquisition system.
