Fortifying Defence
A Chief of Defence Staff and a corporatised Ordnance Factory Board should streamline decision-making and military requisitions
The Journey So Far
Pending nearly for two decades, Prime Minister Narendra Modi finally announced the appointment of a Chief of Defence Staff (CDS), a single-point military advisor to the government, in his Independence Day speech this year. Ratified by the Cabinet Committee on Security, it has set the stage for India’s biggest post-Independence military reform.
The government has decided to corporatise the Ministry of Defence’s (MoD) 41 ordnance factories which make everything, from clothing to armoured vehicles, rifles to artillery pieces, for the Indian army. The decision is yet to be formally announced, but the process has already begun. The factories function as attached offices of the Department of Defence Production, which is a part of the MoD. Together, they comprise the world’s largest defence department and operate under the aegis of the Ordnance Factory Board in Kolkata. More than 80 per cent of the OFB’s orders come from the army. It receives an annual defence budget support of over Rs 2,000 crore, has 82,000 employees and occupies over 60,000 acres of land. Yet, it barely meets even 50 per cent of the army’s requirements. The first moves to end the OFB monopoly came last year, when the government notified 275 non-core items that the armed forces could buy from the open market.
Is It Enough?
A CDS is only the first step. India is among the world’s top five defence spenders but has been unable to translate this into military power. We need to synergise the efforts of the three services of the armed forces
The next step should be to combine the 17 single-service commands into fewer multiservice commands with elements of two or more services
At least three governmentappointed committees Corporatisation of the OFB has been suggested corporatisation of the OFB in the past. In 2000, the T.K.A. Nair committee recommended the conversion of the OFB into the Ordnance Factory Corp. Ltd. In 2004, the Vijay Kelkar committee outlined something similar. In 2015, the Vice Admiral Raman Puri committee suggested corporatising and splitting the OFB into three or four segments, each specialising in one area—weapons, ammunition, combat vehicles.
OFB products have issues of quality and price inefficiencies since the orders are on nomination basis, not through market competition. Improving price and quality have to be a priority.
The Unfinished Agenda
India needs a national security policy, in which the country’s political executives will define national security goals. The strategy for the armed forces will flow from this. In the absence of either a political or military strategy, any reform will be like a roadmap to an unknown destination.
The government should consider the Vijay Kelkar committee’s suggestion of grouping the OFBs into three clusters—one comprising those that manufacture explosives and ammunition, to be retained by the government; second, of those that make armoured vehicles and artillery, to be run as a privatepublic sector partnership; third, those making clothing, uniforms and tents, which can be sold to the private sector