Defence Industry

Pitfalls in Arms Procurement Process
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Issue Vol 25.1 Jan-Mar2010 | Date : 05 Nov , 2010

Modernization of armed forces is a very capital intensive and long drawn process wherein the armed forces first identify their needs and then acquire the same through some rather complex procedures.

The Chinese armed forces have been under a rather expensive make-over for decades to acquire capabilities, far beyond their appreciated needs. Our other neighbor, Pakistan, has been a favored recipient of US largesse consisting of ultra modern weapons, including F-16s ostensibly to fight the terrorists. The Indian armed forces may, in not too distant future, have to counter threats posed by these modernized forces. In addition we also need to develop capabilities to detect, identify and fight non-state players who have the resources and motivation to disrupt our national rhythm by causing unprecedented destruction and violence.

Allocation for the Defense Budget

Allocation of funds for the defense budget, as a percentage of a nation’s GDP, is a globally accepted norm. In our case this figure, generally around 2 percent of the GDP is very closely watched by our neighbors. Every year, in the run up to the annual budget, numerous opinion makers highlight the need for a higher allocation of funds for the armed forces including a larger allocation for modernization. These assertions to enhance the modernization budget overlook some well established practices as well as pitfalls in seeking higher allocations.

Adequate Availability of Funds

Over the years the government refrain has been that the armed forces need not worry about the percentage of GDP that should be earmarked for the defense budget and instead should simply state their requirement of funds. While such an approach does not allow the armed forces to plan acquisitions yet it works. Let us take the case of purchase of additional T-90 tanks for the army. The number of tanks required was calculated and projected to the government after the necessary internal approvals. Within the shortest possible time the whole process was gone through and orders placed.

Ironically our failure to modernize is neither for want of funds nor due to non-availability of suitable weapon systems in the world market.

There were no repeated queries seeking clarifications or questioning the very requirement or any indication that such a large acquisition can impact other proposals. Russians took some time to adjust to the windfall! Thus it is not the availability of funds, which is holding up the modernization of the armed forces. To identify the problem we need to look elsewhere.

Against the rather grim backdrop of our adversaries acquiring disproportionate military capabilities and our failure to acquire the necessary modern weapons for our armed forces, despite an assurance of adequate fund availability, the following issues merit attention:-

  • For over a decade the armed forces have repeatedly assessed their future weapons and equipment requirements vis-à-vis the ever improving capabilities of our adversaries, identified the hardware required; in some cases even trial evaluated the systems and yet a very large proportion of acquisitions remain incomplete. There are arms like the army air defense for which no major acquisition has taken place in the last two decades. Similarly, for over a decade, we have an ongoing process for acquiring modern artillery with little to show. Our Infantry very urgently needs modern weapons to perform its’ task. That the DRDO has not kept their promises has not helped the matters either.
  • Ironically our failure to modernize is neither for want of funds nor due to non-availability of suitable weapon systems in the world market. This state of affairs has resulted from the repeated inability of the acquisition process to spend the available money. Our inability to spend funds and surrender 30 percent or more of the allocation earmarked for modernization, has become a very predictable feature of the defense budget.
  • Despite this completely unacceptable management of very meager funds, which needs immediate correction, there is a very vociferous campaign to enhance the allocation of funds as a percentage of the GDP. Result of any enhancement of funds, without a major overhaul of the system will still be same-even greater surrenders than ever before.

As a nation with a fledgling defense manufacturing base and a near total dependence on imports for modernization of the armed forces we have a host of very informed views on the problems connected with modernization and what we should do about it in line with other countries, with well established systems and procedures. In this regard the following issues are important:-

From a vendors point of view the whole process is “if you buy my product you are honest ““ if you buy my competitors product you are a thief”.

  • We have an acquisition establishment, which suits our native genius. It is manned by handpicked personnel, known for their professional competence and integrity, with adequate systems and procedures.
  • In our country, while other ministries and establishments annually spend funds similar to or greater than defense spending on modernization yet no one is concerned about these acquisitions. For some reasons far too many people who are not part of the system, some of whom will not be able to tell the difference between a tank and a gun, wish to be part of the acquisition process without accepting any responsibility. They make suggestions, which leave one wondering about the source of their technical military knowledge and tactical genius.
  • Our acquisition procedures are so stringent and precise that any wrongdoing will be very difficult to hide, yet the ‘corridors of power’ are flooded with people who promise the moon to the aspiring vendors. Someone who is familiar with the system will say these ‘brokers’ lie! Of course there are occasions when the whole process on the verge of finalization gets wound up. Reasons for the same can be many!

This paper represents the views of a person who has participated in the process of acquisition and has had a ringside view of how the system works. While there are any numbers of highly respected views about modifying our system in line with the Americans or the French, this paper highlights some issues, which, if attended to, may bring about a positive change in the existing system.

Suspicion, Fear and Trust Deficit

These four words in many ways represent the summation of tenure in the acquisition wing. While processing cases, we do everything except to trust our own handpicked people. From a vendor’s point of view the whole process is “if you buy my product you are honest – if you buy my competitor’s product you are a thief”. The moment a vendor becomes aware of rejection of his product in the Technical Evaluation Committee or failure of his product in the trials or any other negative indication he will start a spate of allegations/complaints – sometimes a letter a day.

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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.

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