dna edit: Structural problems and lack of transparency continue to plague India's arms procurement process

Friday, 3 January 2014 - 7:55am IST | Agency: DNA

The AgustaWestland affair has played out somewhat like a car crash in slow motion. Based on precedent, the scrapping of the Rs3,600 crore deal looked increasingly likely over the course of the 10 months since kickback allegations first surfaced. There is a saving grace in that ministers and other VVIPs are the ones most impacted — having to make do with creaking Mi-8 helicopters now until new replacements can be procured — rather than the military. But what the entire affair does is serve as a case study of sorts, illustrating just how the defence procurement system has grown increasingly sclerotic over the past two decades or so, particularly during AK Antony’s tenure as defence minister. And unlike the AgustaWestland deal, the implications for the military are wide-ranging.

There are countries such as the US and China that spend far more than India on procurement; $220 billion and $60 billion respectively to India’s $17 billion in 2012-13. But their needs are largely met by domestic sources, leaving India — and the domestic defence industry’s inadequacy is a whole other bundle of problems  — with the highest import bill at around $12 billion. What this means is that among major militaries, the Indian military is proportionately and uniquely dependent upon foreign suppliers. And it has suffered for it. General VK Singh’s leaked letter to Prime Minister Manmohan Singh last year decrying the state of the army’s preparedness for lack of essential weapons and equipment; the navy’s degrading submarine strength; the depletion of the air force’s combat squadrons all point to just how heavily the military has been impacted.

There is a spectrum of problems plaguing the procurement process and an equally wide range of actors responsible for them. The armed forces, for one, might be the aggrieved party, but they must also shoulder part of the blame when it comes to the initial stages of the procurement process — the framing of weapon system parameters. The Comptroller and Auditor General (CAG), for instance, found in a 2010 report that the army had failed to decide on the features it wanted in its artillery for four years. And another CAG report, this one dating to 2007, pointed to the army creating unrealistic and inconsistent requirements.

But the bigger problems revolve around the ministry of defence; a labyrinthine bureaucracy replete with overlapping jurisdictions, lack of planning and lack of transparency. And as it always will, that opacity engenders both corruption and the perception of it, from the Bofors imbroglio to the Barak missiles and Tatra trucks scandals. Antony’s policies haven’t helped. His solution to the corruption problem seems to have revolved around the twin planks of revising the defence procurement policy (DPP) and going slow on arms deals, including blacklisting firms pending investigation, sometimes resulting in a single vendor scenario.

But the first will serve for little when at every step, the DPP has to work its way through the MoD’s structural and institutional shortcomings, all but untouched by Antony. As for the latter, refusing to move forward for fear of stepping wrong is no way to keep the military in fighting trim. The Parliamentary Standing Committee on defence stated last April there has been a steady decline in the number of contracts signed, from 84 in 2007-08 to 52 in 2011-12. Raising a new mountain strike corps will serve for little when the army’s artillery capabilities are outmatched by both China and Pakistan.


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