“Crippling delays in arms procurement process”: MoD internal report

India’s Defence Budget 2018-19

The Union Budget for the financial year 2018-19 presented by Finance Minister Arun Jaitley in Parliament, has envisaged a total outlay of Rs.24,42,213 crore, of which Rs 2,95,511.41 crore has been earmarked for Defence which accounts for 12.10 percent of the total Central Government expenditure for the year. This allocation represents a growth of 7.81 percent over Budget Estimates (Rs 2,74,114.12 crore) and 5.91 percent over Revised Estimates (Rs. 2,79,003.85 crore), respectively for the financial year 2017-18. In percentage terms, the new Defence budget has marginally increased by only 7.81% which works out to just about 1.58% of the projected GDP for 2018-19, “the lowest such figure since the 1962 war with China”. Even as this figure has been steadily declining in percentage terms as the economy expands, defence and strategic observers opine that it should be over 2.5% to ensure the armed forces are capable of tackling the “collusive threat” from Pakistan and China.

Enhancing Defence Production

In his Budget Speech 2018-19, Finance Minister Arun Jaitley, has announced various steps for enhancing indigenous defence production. These include measures to develop two Defence Industrial Corridors in the country and bringing out an ‘industry friendly’ Defence Production Policy 2018 to promote domestic production by the public, private sectors and MSMEs. Defence Minister Nirmala Sitharaman, stated, “These are the first ever Defence Production Corridors being formed in the country will give a big boost to defence production in the country.”

‘Make in India’ in Defence Sector

Make in India’ in the defence sector, primarily driven by capital acquisition of defence equipment and other policy measures have been taken to promote production of armoured fighting vehicles, combat vehicles, combat aircraft, warships, weapons, ammunition, missiles, radars, electronic warfare systems etc. “Defence Research & Development Organisation (DRDO), the Research wing of Ministry of Defence has been set up with a mandate of developing ‘cutting’ edge technologies and systems for India’s Armed Forces as per their specific Qualitative Requirements.”

An internal report of the Ministry of Defence, widely reported by the media has it that India’s weapon acquisition process is “badly broken and beset with huge delays”. The report detailed that only some 8-10% of 144 proposed programmes have fructified in the last three financial years. This scathing presentation, given by Minister of State for Defence Subhash Bhamre asserts that “the arms procurement process is dogged by multiple and diffused structures with no single-point accountability, duplication of processes, avoidable redundant layers doing the same thing again and again, delayed execution, no real-time monitoring and no project-based approach, among other things.”

“The presentation said there is a tendency to find faults rather than to facilitate the process,” revealed a source. Consequently, the entire ‘Make in India’ policy in the defence production sector continues to languish due to procedural delays, without moving forward in any concrete manner. Cognisance should be taken of these “hard, uncomfortable facts” to ensure “correctives” are put in place, with proper responsibility and accountability being fixed, according to the minister. “From fighters, drones and helicopters to submarines, minesweepers and artillery howitzers, the armed forces continue to grapple with major operational gaps owing to the convoluted procurement procedures and the lack of adequate modernisation budgets in the face of ballooning pay and pension bills.”

Delays in Project P-75 II

Even eighteen months after an extension was granted by the Defence Acquisition Council for Project P- 75 II, which involves the construction of six diesel-electric submarines at a cost of $10.9 billion, neither an Indian shipyard nor any foreign original equipment manufacturer (OEM) has been selected “to get cracking on the project.” Six submarines planned to be constructed as part of Project P-75 (I) have a deadline coming up, even after the dieselelectric submarine project have an acceptance of necessity.

FICV project proceeds

The Defence Ministry’s plan for a Future Infantry Combat Vehicle (FICV) to replace the Indian Army’s Russian-origin BMP-2 infantry combat vehicle inventory is progressing. This massive project costing some of Rs 60,000 crore has been on hold for almost a decade but has recently received approval from the panel of independent expert monitors (IEMs). They have deemed that the evaluation process for selecting firms to produce prototypes of the FICV is “in order and could proceed.” The MoD had earlier