Revisiting the Defence Acquisitions
Predictably, the present scam involving the VVIP chopper deal that has surfaced following the arrest of key officials of the firm that produces Augusta Westland -101 choppers in Italy has been described by “the Congress’ Bofors II”. The nervous UPA government has now put on hold the remaining payment of Rs 2,400 crore along with the delivery of the nine helicopters from the company, pending the outcome of the CBI probe.
India has already paid around 30 percent of the amount but the payment of about Rs 2,400 crore for the remaining choppers is now to be put on hold till the outcome of the CBI probe.
It may be noted that last month India received three of the 12 helicopters for which the deal was struck in 2010 for Rs 3,600 crore. Three of the remaining helicopters were to arrive here next month, while the remaining six were to be delivered later this year. India has already paid around 30 percent of the amount but the payment of about Rs 2,400 crore for the remaining choppers is now to be put on hold till the outcome of the CBI probe.
Though I have been specialising in the fields of security and foreign policy for years, I must confess that the whole controversy, particularly the way the Indian media has been handling it, seems terribly confusing to me. Wrong questions and equally wrong diagnosis are dominating the discussions. S P Tyagi, a former AIR Chief has come under the shadow. Though I do not hold any brief for him, I must say that attacks on him are blatantly unfair since the deal was neither conceived nor signed when he was the Air Chief. It was conceived under the Vajpayee government, which later changed the terms of the deal.
The deal was signed effectively much after Tyagi left office. Tyagi was not even the Vice Chief of the Air Staff – the number two in each of our three services is actually the person who gives the “go ahead” before any acquisition proposal pertaining to his respective service is sent to the Defence Minister – when the AW-101 was being suggested for ferrying our VVIPs by the Indian Air Force.
CBI is an organisation whose credibility is at its lowest because of the way it has been misused by the UPA over the last nine years.
Similarly, to suspect Tyagi because his cousins, as the Italian investigators now say, were the middlemen behind the clinching of the deal, is equally unfair. In an age when a father does not have any control over the activities of his grownup children (even a father trying to have any influence, leave alone control, over his adult son and daughter will be dubbed regressive by those dominating the Indian media and intellectual space today) to argue that Tyagi was responsible for the activities of his relatives and cousins is sheer nonsense. This is not to suggest that Tyagi and his alleged role should not be probed, which incidentally, the former Air Chief has welcomed. But I have serious reservations with the agency – the CBI – that has been asked to conduct the probe.
CBI, as I have written a number of times, is an organisation whose credibility is at its lowest because of the way it has been misused by the UPA over the last nine years. Besides, how can an organisation which is not independent of the government of the day can conduct an impartial investigation of another wing of the same government? If anything, this makes all the more reason why the CBI must be made truly independent of the government, something the UPA government is not prepared for. Secondly, the record of the CBI in uncovering the defence scandals has been really pathetic, to say the least. It is perhaps forgotten that when the UPA came to power in 2004, it had asked the CBI to investigate about half a score of what it said corrupt defence deals under the NDA rule. However, nothing has come out of these investigations as yet.
Given this record, it is extremely doubtful if anything will come out of the CBI probe into the irregularities, if any, in the AW-101 deal. On the other hand, the probe will have collateral impacts on many other proposed defence procurements that the government was pursuing; they all will come to a grinding halt, jeoparadising the country’s security preparedness in the process. We have seen how following the Bofors scam, the country stopped procuring quality guns and artillery and realised badly their absence during the Kargil War. The point is that in India our procurement system is such that in the name of fighting corruption, we equate the corrupt officials with the systems we procure. Bofors was a quality gun, but we stopped having enough of them just because we wanted to punish the persons who made money in buying them! It is like throwing the baby with the bath-water!
A study shows that from the initiation to the signing of the contract, a procurement case has to sequentially go through 7 distinct stages like “Acceptance of Necessity”, “Solicitation of Offers”, and “Trial Evaluation” etc. Each stage consists of 6 to 10 approval points with each approval point having at least 2 submission points.
It is a fact that India is now in a deteriorating regional security environment that will further worsen when the American troops depart Afghanistan in a year’s time. As former Army Chief VK Singh had reminded us on the eve of his retirement last year, India’s weapons are getting increasingly obsolete and the country’s military readiness is questionable. All told, our procedures for defence acquisitions, factionalism within institution, legal maneuvers by defence firms and faulty production systems have led to a dangerous lack of preparation in the armed forces. And here, the inundation of corruption allegations has led to further delays in necessary procurements for the armed forces.
Viewed thus, it is high time to revisit our defence acquisition process. We must ask why is the present system is so highly prone to corruption. Is it really impractical, despite its goal being laudable? The basic point is very simple – we must have value for the money that we pay for buying right arms and ammunitions( the qualitative requirements, known as QRs) from abroad at right price (by floating tenders) and at right time( shortest possible time). And that presupposes that the QRs are formulated in such a manner that they truly reflect the country’s requirement, that there is an objective system of technical evaluation and that there are oversight agencies such as the Central Vigilance Commission(CVC), Comptroller and Auditor General (CAG) and Central Information Commission(CIC) to ensure the due diligence.
Theoretically speaking, we have such a system in place. Practically, however, things are not working. Our technical evaluation system takes too long a time to give the green signal. Our oversight agencies exceed their briefs more often than not by not sticking to the process and going into questioning the rationale of the very decision to procure things, a role they are not technically equipped to play. As a result, the Ministry of Defence (MoD) is in a dilemma. If it strictly plays by the way the oversight agencies look at the system, the desired result may not be obtained in time. On the other hand if it circumvents the procedure, it faces objections from the oversight agencies. And this confusion leads to unnecessary delays.
…over the last two decades, we have been witnessing more and more scams in defence procurements, it is mainly because we have made lobbying illegal.
Even otherwise, there is room for fine-tuning the system that requires clearances in every possible stage of acquisition. A study shows that from the initiation to the signing of the contract, a procurement case has to sequentially go through 7 distinct stages like “Acceptance of Necessity”, “Solicitation of Offers”, and “Trial Evaluation” etc. Each stage consists of 6 to 10 approval points with each approval point having at least 2 submission points. Therefore, any acquisition has to be processed at about 60 to 80 processing points, involving military personnel, civilian officials in the MoD, the Defence Minister, the Finance Minister and the Prime Minister. This being the case, if there is any corruption involved in the AW-101 deal, or for that matter any other deal, then the system as a whole is to blame. And when one talks of the whole system, the major responsibility for the lapses remains ultimately with the Ministers who give the final clearance.
In my considered view, when the procedure is so complicated and requires so many clearances, and all this is all in the name of transparency, the opposite just happens. Because, as we know, in any license-permit raj, corruption thrives. And this is exactly happening in the MoD.
There is another vital point of lobbying, a natural practice. In fact, if over the last two decades, we have been witnessing more and more scams in defence procurements, it is mainly because we have made lobbying illegal. As I had argued once in this column, a lobbyist is like a lawyer. It is a legitimate activity in established democracies such as the United States, Canada, Germany and France. In fact, by keeping lobbying illegal, we are making our decision-making process non-transparent, hence more prone to corruption. We need people from across the spectrum to present their views to the decision-makers. There will be greater transparency if the lobbyists register themselves and disclose their activities and expenditure as is the case in the US. And once these activities are transparent, we will know who are the elected officials and the administrative bureaucrats the lobbyists have met. That way, we will be able to know better the rationale behind a particular policy-decision and be in a better position to evaluate it.
Courtesy: Uday India.