Is the Indian Economy in a slump or on a slow growth path? We could debate it. Either way the consequential reality will be that Armed Forces are up against tighter budgetary constraints. The other reality is that China and Pakistan seem to have no constraints on their defense allocations irrespective of their economic woes. The reflexive and voluble demand will be – hike defense allocations. Let us face a REALITY – that is not going to happen. However, the bigger reality is that the slowdown is not going away in a hurry. The hard reality is that we must continue to modernize with reducing budgets in an environment of increasing threat when our traditional defense providers – the DRDO, PSUs and OFB are not meeting our indigenization aspirations, foreign entities are constantly milking us with price increases and our procedures are strangling us. Phew! A long sentence. However, it encapsulates India’s problem.
Stability- Instability Predicament
India is entrapped in another strange ‘Stability – Instability’ predicament of its making. The Political hierarchy believes that our nuclear, space and missile programs will provide us with security and ‘Stability’. However, there is an increasing ‘Instability’ due to our inability to equip our Armed Forces optimally. When two-bit foreigners talk of ‘a moribund, process bound, bureaucratic defense acquisition system which constantly under delivers on outcomes’, I feel ashamed and frustrated, but it rings true. This instability will increase with reduced budgets if we continue with a business as usual attitude. There must be a tectonic shift. Something like the PM and RM instructing the NSA to hold a free for all boxing event in a dark room, especially compulsory for all ‘Top Guns’ responsible for defense procurement. They can be sent in with ‘Gloves On’ and locked up for a couple of hours till they beat each other to a pulp. When the bloodletting is done, the chances are that they might start thinking straight like a team and facing the situation confronting India – squarely and sensibly. A bit extreme one might say! They can find another way of letting theirs steams out if they find my suggestion to be crass. If all these highly accomplished individuals’ function as a team, they can create history. Of that, I am confident and have faith. That is the challenge I am throwing at them. Let’s hope for the best. Otherwise the ‘Instability’ might be catastrophic one day.
Scope of Modernization
Modernization with tight budgets does not mean belt tightening. It is an opportunity to set things right. It means doing things differently with a sense of purpose for better outcomes. Recast the revenue and capital portion of defense expenditures simultaneously. Revenue recast must address personal and material related issues. All this needs to be done without losing balance. Options available to do this are aplenty. Some are being outlined which will bear results in the long and short terms.
There are several items which are imported by respective Services, OFB and PSUs in a routine manner. These include parts, components, sub systems and some assembles which are of low technology but needed on a regular basis for existing equipment which were once imported. Wonder of wonders, they also include some nuts, bolts and washers. Many of these items can be substituted through indigenization to save costs, time and effort. However, to make a difference, a serious multipronged import substitution drive must commence by all revenue procurement agencies, MSMEs and Research institutions. It is a low hanging fruit of immense potential. It has payoffs beyond the immediate.
China has progressed to hi tech weapon systems, by reverse engineering. Why can’t we do that? We can and have done it in the past. Way back, in the early 80s, the 105 mm UK Light Gun was brought to India. It was left in India for a couple of months due to lack of ship passage. A Gun Development Team was put together and let loose on it. Lo and behold in a matter of few years we reverse engineered it and the 105mm Light Field Gun came into service. It is still in production, in service and relevant. It is still identical to the UK Light Gun and the US Light Gun. Can’t we do similar things now? There is a strong case to identify and undertake reverse engineering projects on a mission mode.
Quality should be a mantra. If there is one area which the DRDO, DGQA and OFB plus PSUs are guilty of; it is lack of quality and accountability. The statistics and reports in the MOD speak for themselves. Add to this the inefficiencies of respective organizations. Most accidents and incidents with indigenous ammunition, rockets and missiles take place due to abjectly poor quality. Any ammunition related accident has multiple effects – loss of life and limb, double whammy costs due to the entire batch being thrown out and replaced and reduced operational preparedness. Most importantly troops lose faith and confidence (justifiably) in the ability and reliability of DRDO, OFB and PSUs. Go to any post-accident review meeting. You will witness a shameless cat and dog fight with everyone covering his backside and pointing a finger at the others. There is no concept of accountability. Stringent and draconian quality control and accountability measures need to be instituted. If it means sacking a few heads of factories and establishments, so be it.
There is a propensity to go in for the latest weapon, with top grade specs, and a brand-new development or procurement project. That is the typical glossy magazine syndrome. Why can we not upgrade existing equipment to effective specs. This will be especially useful when we have TOT or have used the equipment for years together. The Dhanush 155 mm has followed this principle with great success. Why can’t a similar approach be adopted for our ICVs when we have so much experience on BMPs? Do we need a FICV at all? Why can’t we upgrade the BMP to FICV specs? Examine the T Series of tanks built by Russians. From the initial T34 to T54, T55, T56, T62, T72, T90 and T14, the designs are evolutionary through systemic upgradation and new technology injection. Why should we go in for the revolutionary route, which is costlier and time consuming? Upgradation also allows us to postpone a new buy at better economic time when we might get better technologies.
Our pricing mechanisms and competencies are scandalous to say the least. I am quite certain that the OFB and PSUs are overcharging the system by a mile. Take the case of the Dhanush155 mm Gun. It has a price tag of about Rs 16 crore per gun. This is the no profit price, audited by defense finance, as is the norm for all products of the OFB. On the other hand, the Israeli 155/52 cal gun is being negotiated for about Rs 10-11 crores each (includes profit for the foreign OEM)! Both are simultaneous developments with similar technologies. Why this huge differential? Obviously, the Defense Finance mechanism is either complicit in this over pricing or they are plainly incompetent. There is no third answer. More cases can be quoted. A rigorous and professional cost analysis mechanism must be put in place. I do hope the Secretary Defence Finance takes note of this. Our finance people should be better operationally orientated for sensible costing advise. The finance people need an altitudinal shift to be part of the system. They have traditionally been spokes, which are apart from the system.
I have been of the opinion for long that a realistic joint operational outlook will allow us to reduce manpower and prioritize capital expenditure. I will reiterate a case which I have pointed out earlier.. Convert our three armor heavy strike corps ranged against Pakistan into mountain capable reserves composed of Infantry and light weight long range Artillery. Just shed the armor component to the defensive formations to take care of Pakistan, which is a receding threat. The resultant will be mountain capable dual tasked reserves capable of handling both fronts. The entire strategic dynamics will get an uptick with considerable saving in manpower. Similarly, can our Armor improvement programs be revisited based on a realistic threat assessment from Pakistan? Do we need to talk of capability-based force structuring when we should be limiting ourselves to being structured as a threat-based force?
We have always spoken of lateral induction of ex-servicemen, after their retirement, into PMF to save on the pension bill. We have always failed to get this thought off the ground. Why not do it the other way around? Let CPMFs recruit soldiers. Let them come on deputation and serve in the Army for a stipulated/fixed period and then go back to their parent PMF. The Army can recruit that many less. The saving will be huge. A central recruitment system for the CPMF and Services can also be considered. A lot of infrastructure costs can be shared. This issue must be tackled politically and thrust down people’s throats, so that inter-ministerial and inter -departmental issues can be hurdled over.
Capital Procurement Prioritization
There is no doubt that capital procurement will and must go on. However, there is a strong case for prioritization and phasing of procurement as per what we can afford and what is operationally necessary. Such prioritization should be consistent with the way the cases are progressing. If this can be combined with roll over of budgets and allocation, true economy will set in. Presently such thinking or mechanisms are not there in our system. It needs a holistic thinking. Hopefully the CDS when appointed can attend to this issue.
There is a strong case for military – bureaucratic integration to shorten the procedure and time loops. Ideally it should be a restructuring of MOD. Our mindsets will however not allow that to be done in a hurry if the pace of reorganization effort of the Army HQ is an indication. Hence effort should be to cut through our multi layered bureaucratic fat. This can be achieved by forming empowered integrated project management teams for progressing important cases in a time bound manner. There is also a case for a monitoring and review mechanism to be put in place by the DAC to effect course corrections. There is a clear case for a Procurement Advisory Board made up of proven experts to advise the MOD; akin to the National Security Advisory Board to provide intellectual input. The effort should be to get rid of the tag of being a Disintegrated HQ of MOD.
The suggestions which have been outlined are only a few and many more can be thought of. However, the larger message being conveyed is that the slow down is real. Budgets are going to shrink. Adversaries are not going to vanish and might smell an opportunity in our weakness. Doing the same thing again and again only reinforces failures. We need to do things differently as a team with purpose. ‘Make in India’ ‘Start up India’ and ‘Indigenization’ have become jargon which are mouthed as routine without any intent, understanding or method. Outcomes have only been poor. ‘Make in India’ will not succeed by attempting to do the big things which we can not do but doing the small things which we can do. In doing so, gain experience to do the bigger things. Our defense planners need to understand this simple truism. My guess is that they do not see such elemental truths since they are all brilliant individuals working as a poor team. Can it change or is mine the bleat of a senile veteran?
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