Home arrow Archives arrow Defence Notes arrow Defence Notes 2006 arrow Military Procurement Policy:PLAN FINE, ENSURE IMPLEMENTAIOTN,by B.K. Mathur,4 September, 2006
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Military Procurement Policy:PLAN FINE, ENSURE IMPLEMENTAIOTN,by B.K. Mathur,4 September, 2006 Print E-mail


New Delhi, 4 September 2006

Military Procurement Policy


By B.K. Mathur

Earnest efforts are being made by the Defence Ministry to set right the controversial and complex process for acquiring defence equipment that involves substantial public funds ---and the increasing scams that go with it. The present Defence Minister, Pranab Mukherjee initiated guidelines and worked out a Defence Procurement Procedure (DPP) and Defence Procurement Manual (DPM) last year.  This has again been reviewed and further improved to ensure enhanced transparency and public accountability.  The new policy stipulates a “collegiate manner” for major decisions by the Defence Acquisition Council, increased transparency in field trials and level playing field for indigenous vendors vis-à-vis foreign suppliers.

One very good thing which the new policy has tackled is the indigenisation of military machines production.  Successive Defence Ministers have concentrated their efforts on this front, but have not been able to get the required results and obtain one hundred per cent indigenisation right from the designing stage of expensive machines.  This has been happening for years, which does not seem to have been considered in depth in the latest Defence Procurement Policy (DPP) and Manual. Why is it that despite the internationally-recognised fact that young Indian defence scientists are inferior to none in the world, India has to depend so heavily on imported machines?  And, how is it that even though the Defence Research and Development Organisation (DRDO) has designed several state-of-the-art machines they invariably fail at the production stage?

It is true that the Defence Ministry has taken a wise step in including in the DPP-2006 a separate procedure for the “make category” (for producing the military machines fully indigenously.  Earlier, the procedure was laid down only for “buy” (off-the-shelf purchase from abroad) and “buy and make” (off-the-shelf purchase abroad with licensed production indigenously). The addition in the policy of the “make procedure”, as spelled out by Pranab Mukherjee, is based on the recommendations of the controversial Kelkar Committee and the Sixth Report of the Defence Ministry’s Parliamentary Standing Committee. The procedure has been designed to enable Indian industries to develop high-tech complex systems and their production wholly indigenously.

In this context, it needs to be considered that production of military machines is quite different from that of other items. A state-of-the-art military machine requires thousands of components which cannot be produced under one roof. No industry, whether in public sector or private, can afford to produce all the components with their limited use. Take, for example, the requirement of just one or two small components of a specific design for use in a big machine. It is not economically viable for anyone to set up a facility to produce that small component.  It is either to be imported or produced in bulk for exports to the countries which are producing same kind of machines or some other product where that particular part could be used.

This kind of approach requires two things: Government’s support and active cooperation of the private sector industry. None of these is happenings, even though the Defence planners have been repeatedly talking of increasing indigenization of defence production for decades.  But when it came to acquiring a machine the choice invariably fell on direct off-the-shelf import at high price. In this process several vested interests got involved and scandals erupted.  Poor Indian designers, young scientists and technicians remained dissatisfied, cursing the Defence Ministry for inadequate support for their work.

During the last three decades or so, the DRDO and the Indian Defence industry have undertaken production of two major fighting machines for the armed forces: main battle tank (MBT) and the light combat aircraft (LCA) and several smaller equipments and weapon systems.  The MBT has been named three or four times since 1972 when it was first thought of, and now some pieces produced so far have imported engine. And, more concernedly, the Arjun tank is not going to be the Indian Army’s MBT.  It is the Russian tank which the producer updates almost on five-yearly basis.  Same is the case with the LCA, which has undergone several trial runs with imported machines, but is yet to be inducted into the Indian Air Force.  In the meantime, we have purchased fighter and trainer aircraft from abroad at high costs.

Call it coincidence, if you like, but actually it is a normal practice. About the time when Pranab Mukherjee had announced the DPP-2006, Hindustan Aeronautics Ltd. (HAL)  declared the scrapping of its earlier plan to produce indigenously the latest Su-30MKI fighter aircraft it was required to do following the license-production deal with its Russian producers in December 2000 --- the single-largest Indo-Russian defence contract in 40 years.  The last of the 140 indigenously-produced aircraft were to be supplied to the IAF by 2017.  Wonder what will happen to the deal, even though the Russian company has so far supplied 26 kits to the HAL for the assembly of the aircraft. It would earn $350 million for this supply.

Another lacuna which the new policy has tried to tackle is the unusual delay caused in finalizing the purchase of a modern machine.  In some cases, by the time a decision is finalized after satisfying several vested interests, the machine that ultimately gets into the hands of the users, that is the armed forces, becomes obsolete and a new version is ready with the producer. The new policy has introduced a welcome change in this process. Efforts have been made to shorten the timeframe for procurement which presently starts with the enunciation of qualitative requirements by the armed forces, followed by acceptance of necessity, identification of vendors, issuance of requests, technical evaluation and final approval.

The DPP-2006 includes a revised fast track procedure to expedite the acquisition of equipment which the armed forces need to meet urgent operational requirement within the shortest possible time.  Fine, but enough does not seem to have been provided to determine the priorities for acquisition.   You just can’t acquire everything that has been produced in the world at a time and within the budget provision.  Take, for example, the purchase of the most controversial 155 mm gun for the artillery, which even caused the fall of a Government.  It is true that the procurement of the howitzer was required in the interest of the Army’s modernization.  But the 130 mm Russian gun was well serving the purpose, as proved in 1971 and 1999 in Kargil. The priority at that time should have been on a raised platform for the artillery.

Likewise, the Defence planners do not seem to have given proper consideration for prioritizing the procurement of expensive equipment for the Navy. Should the sea force first have nuclear-powered submarine or an aircraft-carrier? Indeed, the ideal situation would be to have both. But prioritywise, a submarine should be the first choice, which is not happening at present. More about it another time. In regard to the procurement policy for the armed forces which has now begun to receive attention at the highest level, it is necessary to have full cooperation and understanding between the users, producers and policy makers. Merely plans on paper are not enough.  They need to be implemented faithfully--- and in the interest of the nation, not individuals. ---INFA

 (Copyright, India News and Feature Alliance)

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