Discussion with Defence Expenditure Review Committee (DERC)

 

The Defence Expenditure Review Committee (DERC) constituted by MoD, visited CLAWSon 11 Dec 08 for a discussion/interaction with serving/ retired/ civilian officers with a view to identify measures by which the Defence Budget can be utilised  in cost effective manner, with greater degree of transparency, accountability. ADG (FP) and senior members of the CLAWS fraternity attended the discussion.

 

 

The committee comprised the following :-

 

(a) Shri VK Misra, former Secretary (Defence Finance) : Chairperson.

 

(b) Vice Admiral V Bharathan, PVSM, AVSM, VSM (Retd).

 

(c) Lt Gen VK Chopra, PVSM, VSM (Retd).

 

(d) Air Marshal AK Nagalia, AVSM,SM,VSM (Retd).

 

(e) Shri Amit Cowshish, JS & Addl FA, Ministry of Defence (Finance).

 

(f) Shri Ajay Tirkey, Joint Secretary, Ministry of Defence. 

 

 

 

Agenda for discussion was as follows:-

 

(a) Optimal efficiency in the system, with greater focus on Information & Communication Technology (ICT).

 

(b) Greater efficiency and economy in supply services through outsourcing and reorganization.

 

(c) Greater transparency and accountability in regard to management of defence expenditure.

 

(d) Higher efficiency in logistic supply chain management.

 

(e) Outcome orientation in defence spending.

 

(f) Enhanced self-reliance by tapping the strength of the vibrant private sector.

 

(g) High levels of preparedness/serviceability of weapon systems.

  

(h) Greater efficiency and economy in training.

 

 

 

Welcome Note .   A welcome note and grounds for discussion were given by Director, CLAWS who welcomed the participants and made a brief presentation on the threats and challenges facing the Army and a possible future force structure.

 

Opening Remarks. Mr VK Mishra (Retd) ex FADS  in  his opening remarks brought out the need for integrated response for efficient  utilisation  of defence budget. He mentioned that a Road Map of 15-20 years need to be drawn to attain defence capability commensurate to the changing paradigms of National Security.  He emphasised the need for better financial management, accounting, planning, procurement (including time frame) and costing of inadequacies.  He mentioned about ‘outsourcing of studies’ and interactions with organisations like FICCI, ASOCHAM AND CII.

 

 

Under mentioned aspects were brought out during the proceedings:-

 

(a) There is a need to identify nature of war/conflict, related doctrinal issues, force structuring and accordingly acquisitions.

 

(b) No Modernisation can be  expected at 2% allocation of GDP as Def Budget. Minimum requirement would be 3.5–4% GDP for any meaningful modernisation.

 

(c) No approval of 11th Defence Plan (2007-2012) has been accorded.

 

(d) Need for transparency and time bound processing of cases by the respective services and MoD bureaucratic staff.

 

(e) Need for pragmatic QRs for procurement of equipment.

 

(f) Review of rules, procedures and regulations to  incur expenditure.  It was confirmed by JS & Addl FA that DPP 2008 has been published and DPM 2008 is under preparation. The documents will facilitate processing of cases in an early time frame.

 

(g) It was highlighted that there is a need for greater devolution of financial powers to commanders and staff as many a times large sum of budget is surrendered due to non-utilisation.

 

(h) Necessity to continue to have APS, RVC and Military Farms were discussed.

 

(j) In view of IT development, suggestions were put up to combine the PAOs so as to review the PAO and Regional CDAs manpower.

 

(k) Outsourcing and greater transparency wrt MES, ASC and Ordinance factories were brought out.

 

(l) It was proposed that CSOs and officials in MoD at Director and JS rank be put through defence courses such as DSSC, HC/HDMC and NDC.  This woul facilitate better comprehension of functioning in defence services and the needs, thus  achieving optimal efficiency.

 

(m) Standardisation of inventories of the three services and  associated departments was emphasized.

 

(n) Finally, it was brought out that quantification in terms of efficiency and training oriented activities be worked out for objective improvements.

 

 

During discussions, relevance of transparency, interaction through training and accountability with timelines at all levels of IHQ of MoD hierarchy was highlighted. Standardisation of equipment and greater devolution of financial powers were emphasised.

 

(Report prepared by Col SM Singh, Research Fellow, CLAWS)