Originally Published 2011-10-11 00:00:00 Published on Oct 11, 2011
Nomenclature notwithstanding, the evolution of an Indian National Security Industrial Complex (NSIC) must be watched with interest and caution.
From MIC to NSIC
A recent piece written by Paul Harris in the Guardian newspaper (subsequently reproduced by the Hindu on 6 September 2011) has narrated the ubiquitous linkage between war and military business that has taken shape in the US, especially since 9/11. He argues "one of the most disturbing developments of the post-9/11 world: the growth of a national security industrial complex that melds together government and big business. It takes many forms. In the military, it has seen the explosive growth of the contracting industry. In the world of intelligence, private contractors are hired to do the jobs of America's spies. A shadowy world of domestic security industry has grown up, milking billions from the government and establishing a presence in every state. Spending has been lavished on security projects as lobbyists cash in on behalf of corporate clients.Meanwhile, generals, government officials and intelligence chiefs flock to private industry and embark on new careers selling services back to government. While the rest of the America is in recession, this industry is witnessing economic boom".

The magnitude of the government-military business nexus needs to be understood in a larger framework. Consider this: more than 1,271government organisations have been created since 2001; 1,931 private firms have come up to do jobs related to counter-terrorism, intelligence and homeland security; more than USD 400 billion already devoted for homeland security, excluding the Pentagon budget meant for the military purposes that has crossed USD 2.5 trillion in the last eight years; the workforce of Department of Homeland Security has gone beyond 2,30,000; contractors from more than 100 firms account for more than one-third of the CIA now; eight out of ten lobbyists for the security industry come from a previous career in government or Congress; between 2004 and 2008, and a startling 80 per cent of retiring three- and four-star officers went to work in the private sector.

Paul reminds us of the same nexus that perturbed the American leadership half a century back when in 1961, the then President Dwight David Eisenhower had warned the Americans of the disastrous consequences of the undue influence exerted on the polity by a growing Military-Industrial Complex (MIC, the term was first used by him in his farewell speech). The only difference between 1961 and 2011 is that the MIC has now taken a larger shape of what is called National Security Industrial Complex (NSIC) - unimaginably gigantic in shape and unfathomable in influencing the state. Consequences of this trend are yet to be calculated.

Although the state capacity is different and security problems differ in scope and magnitude, India presents an evolving picture that might resemble what the Americans have been witnessing at least since the 1950s - a growth in MIC followed by a transformation into an NSIC. The growth in the former is already visible and the latter may take shape sooner or later in the next few decades.

Ever since reforms in higher Indian defence sector underwent structural-organisational changes, there have been a profusion of state-driven institutions within MoD and armed forces. Elsewhere, many security-related research institutions have come up while many are in contemplation stage. The Indian MIC, although monopolized by the huge state-owned production entities like the ordnance factories and defence public sector, is also witnessing interesting developments after the government decided to open up the defence sector for private participation. There are about 400 Indian companies - big, medium and small - that are interested in doing defence business, out of which nearly 40 percent have previous records of supplies to state-owned defence enterprises. In addition, as many as 50 foreign companies have either opened their India office, primarily located in New Delhi and Bangalore, or announced joint ventures with their Indian counterparts. Bulk of the senior management staff of these companies are drawn from the retired pool of armed forces and civil bureaucracy for obvious reasons. Although figure is difficult to arrive at, yet it would be reasonable to assume that there are more than 50 security risk firms, located in Indian cities and engaged mostly in fusion research (blending information available in public domain and information gathered through private sources) in Indian defence and internal security affairs, primarily catering to a large section of multi-national companies interested in defence business. During the same period, many national security institutions like NTRO, NIA, MAC, NATGRID, etc. with existing institutions within the security and intelligence domains either acting independently or some of them proposed to be coming under the larger yet-to-be-born organization called National Counter Terrorism Centre (NCTC). It is obvious that the Indian NSIC scenario will be miniscule in comparison to the American, but the trend that is slowly emerging in India is worth pondering, at least their future implications.

Three factors have been placed here for further deliberations. First, unlike in the US where the MIC became private-driven in a of twenty years (from early 1930s till late 1940s), the Indian MIC has been state-driven, yet sectoral industrial advancements have been remarkably similar - touching almost every field of military industry and now internal security domain. Second, magnitude of the milking of state resources by the MIC or NSIC in the US is much larger, yet the emerging Indian trend is slowly catching up as more institutions mean more resources allocations. Third, the level and extent of influence of the MiC or NSIC in the US may be larger in comparison to India, but the latter is witnessing a combination of influences coming from industrial lobbies (although lobby firms are yet to be visible prominently in India) and even supplier states.

Eisenhower's warning may sound far-fetching for India, but the emerging trends must be watched with caution and the state must ensure that it does not fall into the ubiquitous trap. A balancing act must always be in the minds of the policy makers.

(The author is a Senior Fellow in Security Studies at Observer Research Foundation, New Delhi)

Courtesy: The Financial Express

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