Defence Industry

Public Sector: survival through circumventing competition
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Issue Vol 24.2 Apr-Jun2009 | Date : 07 Jan , 2011

As regards the past track record, the designated DPSU has acquired notoriety for time and cost overruns. When asked to provide time and cost details of completed projects during its presentation, the DPSU’s reply was a juvenile exercise in dodging the real issues.

“The Indian military will continue to be dumb and deaf in the battle field. Given our current communication system which is archaic, we will not be able to exchange voice, data and video. I wonder if the mandarins of DDP understand the damage they are doing to India’s defence potential,” commented an officer.

Another exasperated officer went to the extent of saying that DDP’s intransigence smacks of unpatriotic and anti-national behaviour. “How can officials deny modern systems to the services for purely partisan interests? I wish the national leadership takes notes of such negative elements and takes action against them.” “How can officials get away with actions which are inimical to national interests?” he wondered.

MoD continues to play favourites, brooking no challenge to the monopoly of an inefficient, insecure and inapt public sector. All efforts are made to thwart attempts of the private sector to get an equal opportunity.

The services want the best equipment in the given time frame. Therefore, they prefer competition and want the most competent entity to get the contract. As regards the private sector, it seeks an equal opportunity to compete and does not grudge a public sector company winning the contract if it emerges the best. It is a very fair and reasonable demand.

The Way Forward

The Defence Minister has been expressing his unhappiness at the slow pace of modernization. TCS presents itself as a study case for MoD to draw lessons and introduce corrective measures. Policy statements and frequent assertions mean nothing unless followed by honest ground implementation. As seen in the case of TCS, a mockery has been made of the much touted ‘Make’ policy. An impermissible new categorization, ‘Make by DPSU’, has been fraudulently introduced to favour the public sector. The Government’s claims of providing level playing ground to both public and private sectors have been belied. TCS case has certainly raised questions regarding the Government’s sincerity and dented its credibility.

MoD continues to play favourites, brooking no challenge to the monopoly of an inefficient, insecure and inapt public sector. All efforts are made to thwart attempts of the private sector to get an equal opportunity. As has been the history, the public sector continues to thrive on patronage, monopoly and captive customer base. Adverse effects on the fighting potential of the services appear to matter little to the protectors of the public sector. As a dismayed expert observed, “It appears that the survivability of an inefficient public sector is being given precedence over national security.”

“Either the Government should stop claiming equal treatment of public and private sectors, or reign in its errant officials who make a mockery of its policy”, stated a private sector functionary. “We have been taken for a ride. Trusting Government’s repeated assertions of fair play, we have invested heavily in technology and infrastructure. However, nothing has changed on the ground. Every major project continues to go to the public sector and we are left looking for left over crumbs,” he added.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Maj Gen Mrinal Suman

is India’s foremost expert in defence procurement procedures and offsets. He heads Defence Technical Assessment and Advisory Services Group of CII.

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