Having no easy routes to sorting out the Indian defence mire, the MoD needs to take corrective measures towards military planning and readiness.
On May 31, Rajnath Singh took over the reins of a Ministry that has become emblematic of everything wrong with the Indian governmental processes — delayed decision-making, bureaucratic red-tape and inertia, and an over abundance of committees. A minister with Singh’s political heft is in a position to effect serious positive change at the MoD and finally move stalled reforms and modernisation along.
That India’s military manpower situation is a mess and its pension bill a looming budgetary disaster is well known. Even the Prime Minister, not typically known for wading into defence-related minutiae, noted at a Commanders’ Conference in December 2015 that “modernisation and expansion of forces at the same time is a difficult and an unnecessary goal.” Nevertheless, manpower reform has received little more than lip service in the years since.
Defence pensions already account for more of the budget than salaries — and at over one lakh crore each, salaries and pensions dwarf the paltry 93,000 crore allocation for capital expenditure. In any case, the bulk of capital budget is tied up in scheduled payments for contracts already under execution, leaving little for new procurements.
The other principal obstruction to resource optimisation is the glacial pace of decision-making, under the guise of ‘adhering to procurement processes.’ First, the inability to shepherd labyrinthine procurement programmes through to contracts results in unspent capital allocations. At a time when defence modernisation has to ‘run just to stand still’ relative to the regional security challenges, it is a ludicrous state of affairs to be unable to spend what little is budgeted.
Second, dithering adds to capital costs. The vast bulk of capital procurements involve imports from foreign companies, either directly, or as sub-assemblies to domestically-delivered hardware. These foreign suppliers have to apply time-based escalation multipliers to their commercial bids, knowing full well that Indian defence procurements, particularly for big-ticket platforms, take years to reach fruition. Initial bids are therefore heavily padded to account for escalation and hedge against inflation and currency fluctuation. Instead of addressing the cause behind these inflated bids, MoD negotiators waste years trying to negotiate discounts that they could get by simply closing deals sooner.
The heavily import-reliant Indian defence procurement system is always chasing competing goals — low cost, high technology, domestic economic stimulation, and employment generation. The Ministry needs to realise that the very nature of these imperatives means all can never be achieved together, and certainly not within the constraints of the present procurement procedures. With each major acquisition programme, the MoD should decide which one or two areas it wants to prioritise, and proceed accordingly. The lowest bidder system (L1 contracting) also needs serious re-evaluation — there’s a reason ‘you get what you pay for’ is such a well-worn maxim.
No serious global power can be completely import-reliant for its security needs. At the same time, there is also clear economic value in globalised supply chains. The Ministry needs to take a more active role in directing systematic indigenous defence R&D. Re-inventing low-value hardware is a waste of funds in an already resource-constrained environment. The same applies to local production of basic parts or assemblies, where the non-recurring costs of setting up domestic production cannot be effectively amortised.
Defence R&D needs to give priority to strategic and high value platforms — areas where India has traditionally prioritised simple licence production or outright purchases instead. Meanwhile, re-developing consumables and munitions is a complete waste of time, but for some reason we waste decades trying to re-invent bombs and rockets that could easily have been licence-produced en masse and economically.
Building domestic intellectual property (IP) is a worthy pursuit, but the MoD has to balance development time and cost against operational necessities — most of which have become urgent given the decades of defence mismanagement the military has been subjected to. In cases where simply buying IP rights would save time and achieve the same end result, the Ministry has to act decisively, and not be constrained by bureaucracy or red tape.
No military can plan operations based only on promises, and extended R&D timelines make a mockery of military procurement planning. Elaborate tri-service programmes like the 15-year horizon Long Term Integrated Perspective Plan (LTIPP) and five-year Services Capital Acquisition Plan (SCAP), which are at present little more than exercises in futility, both because of the indecision that plagues all procurement, in addition to the abysmal pace of domestic research.
There are no easy routes to sorting out the Indian defence mire, and if the MoD can push forward in even one of the areas highlighted here, it would be a major step forward for military planning and readiness.
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Angad Singh was a Project Coordinator with ORFs Strategic Studies Programme.
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