THE AGUSTA WESTLAND EPISODE
WHAT AILS DEFENCE PROCUREMENT IN INDIA
What is fortuitous in the Agusta Westland deal which is much under discussion in the Indian media, is that the helicopter was meant for use by VVIPs in India. In a society which is obsessed by the term VIP / VVIP it is perhaps poetic justice that has invited so much attention on these two countries; India and Italy. The question that should be uppermost in the minds of the common man is,"why has it taken twenty years or more to procure a helicopter for our 'beloved VIPs and VVIPs?' If they cannot be looked after, how long will it take to get platforms, equipment, arms and ammunition for the fighting arms of the services of India? " The answer has been blowing in the wind for decades; starting from Independence to the Kargil war and stretching to date. From starting a case for acquisition to signing a contract has taken one to two decades in most cases. whether it was the Main battle tank(MBT) for the army, the Advanced Jet Trainer (AJT) for the airforce, Light combat aircraft(LCA) and scores of other platforms and equipment whether imported or indigenous met with the same fate.
Dr Abdul Kalam in his capacity of SA to RM in 1996, made an effort through a self reliance implementation Committee(SRIC) to increase the indigenous content of procurement for our armed forces. Having been a member of that committee and having participated in never ending processes of the Ministry of Defence, I now see the light at the end of the tunnel. Let me explain for the benefit of the layman.
Known Obstacles in procurement
First ,Inability to convert long-term induction programmes into time-bound acquisition plans along with budgetary support. Although the service headquarters of the three services periodically submitted 10/15 year plans, the Ministry of defence neither had the expertise to accept or reject such proposals nor was there assurance of budgetary grants for such plans. Ministry of Finance often sprang a surprise by reducing allocations to MOD just prior to announcement of the budget.
Second, the service Chiefs neither had financial powers to run the revenue nor the capital budgets allocated to their respective services till the New management strategy was first introduced in the late 1990s. Their powers for capital expenditure remains limited.
Third, excessive reliance on public sector manufacturing and production agencies and inability to provide level playing field to competent private industries deprived the forces from the timely supply of equipment as also of international quality of products.
Fourth, protracted procedures for compiling Request for proposals and field trials resulted in unaffordable opportunity costs to be incurred by the Government. Neither the Ministry nor the service headquarters was held accountable for inordinate delays which ipso facto led to frequent changes of performance related quantification.
Fifth, inability to meet stringent time schedules of indigenous equipment to match the operational needs of the forces, often resulted in the import of platforms and systems which in turn created its own dynamics of middlemen, corruption and litigations. Blacklisting of foreign suppliers caused further delay in restarting the process ab initio. Consequently, the end user was forced to continue to use obsolete and obsolescent equipment with no hope of replacement for decades.
Defence Procurement Policy.
Some of the obstacles quoted above suggest that a clear cut policy framework is essential for streamlining the whole process of procurement. It was the Group of Ministers post the Kargil war that recommended setting up a procurement structure for time bound acquisition of platforms and weapon systems. Such a system was created in 2002 but significantly the process of integration of the armed forces with the MOD ,recommended by the same GOM was not implemented.
Such were the complexities of procurement which encompass numerous factors concerning procurement from within and without. that DPP was revised in 2005,2006,2008,2009,2011 and 2013. Any sane organisation would desist from issuing policies almost every year, which compound issues and confound the suppliers. That was perhaps the reason why hardly any worthwhile procurement including ammunition took place during that period.
DPP 2016
The latest DPP issued during the recently concluded DEF EXPO at Goa has some notable and far-reaching policy formulations. Extensive consultations with leading industries of India and abroad gave birth to Digital India, Make in India, Start up India all of which have an impact on the DPP. All three have interlinking policy directions for executing the vision of the Government. Consequently, the following weaknesses in the procurement system have been addressed comprehensively;
· The parameters and processes for Make in India have been articulated with emphasis on self-reliance through the facilities of the much improved indigenous public and private sectors. Incentives and assured production order with possible export capabilities have been covered.
· Offset conditions for foreign suppliers exceeding the supply of Rs 2000 crores has been specified with clarity.
· Incentives for MSMEs and the need for the Government to bear part costs for design and development has been recognised.
· Transparency, probity and public accountability form the backbone of the policy document.
· Long Term Integrated Perspective Plan (LTIPP), the 5 years Services Capital Acquisition Plan (SCAP) and Annual Acquisition Plan (AAP) for all three services duly integrated by the Integrated Defence Staff under COSC have been rationalised.
· Fast track mechanisms have been streamlined. Much would depend on execution of the policy
· Strategic partnerships commensurate with current geopolitical realities are under consideration. Transfer of technologies and access to cutting edge technologies are part of discussions currently in progress.
What more needs to done
Three missing links in the Government's well-directed efforts are the integration of the three forces under a CDS ,the integration of the MOD with service headquarters to professionalise decision-making at MOD and to eliminate corruption at the final settlement of payment to indigenous suppliers at the respective CDA outlets. The latter has been pushing the cost incurred by suppliers which can be totally neutralised if there is a will. Digital India ought to remove this undesirable interface and facilitate direct payments to suppliers.
There is hope that the VVIP Helicopter along with long pending demands of the services will all be met within the stipulated time frame. The term VVIP should be dispensed with.
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