National Seminar on Defence Acquisition

“Our defence forces should be prepared for all contingencies and threat from all quarters. For achieving the required capability, the focus of the defence forces should be on high quality equipment, high-class training and welfare ...”
Hon’ble Raksha Mantri, while delivering the keynote address for the Seminar on Defence Acquisition

General

A National Seminar on Defence Acquisition was held at the Institute of Defence Studies and Analyses on 27 October, 2009. The essence of the discussion centred on the requirement of expediting defence procurement for capability building with due emphasis on self-reliance, transparency and economy. The debate centered around ‘responsibility’ versus ‘authority’ thereby questioning the financial and procurement powers enjoyed by the bureaucracy in MoD, without the associated responsibility that the defence brass have to bear in times of war.

Opening Remarks by Shri K Subrahmanyam

Shri K Subrahmanyam elucidated the geo-strategic environment and India’s growing influence at the regional and global levels. The requirement of military capability enhancement in sync with the politico-economic growth was the central theme of his address.

On the issue of integration of the three Services at the apex level (IDS) and the pending CDS issue, Shri Subrahmanyam said:-

(a) Instead of a CDS, a Chairman Joint Chief of Staff was more appropriate.

 (b) The CDS / proposed Chairman Joint Chiefs should be an advisor to the Minister and not commander of troops.

(c) Theatre Commanders should be the commanders of troops and should report to the Minister directly.

While the proposal has been under discussion in various forums for some time and has inherent advantages, the underlying threat of the powers of the COAS getting further eroded needs to be considered. Greater role for the bureaucracy at the apex level is inherent in such a proposal. Theatre level integrated operations under one Theatre Commander suffer from the ‘turf wars’ syndrome.

Keynote Address by the Raksha Mantri, Shri A K Antony

The Raksha Mantri applauded the defence fraternity on having institutionalized and actualized a very comprehensive and transparent Defence Procurement Procedure (DPP). Salient aspects of his address are as follows:-

(a) Essential delay areas in the DPP are firstly the GSQR formulation, which owing to frequent changes, causes avoidable delays and secondly the processes at the MoD and MoD Finance which also need to be further streamlined.

(b) The DPP is revised every year with the aim of ushering in greater transparency, greater competition amongst vendors and self reliance by encouraging ‘buy and make’ projects.

(c) Independent Monitors have been proposed to monitor major defence procurements. These monitors could be drawn from retired defence and civilian officers fraternity and non-governmental personnel.

(d) The Raksha Mantri exhorted the participants to also deliberate on the issues of logistic management, life cycle concept and post contract management and come up with implementable solutions.

Address by Shri VK Misra, Former Secretary, Defence Finance

Shri VK Misra’s address dealt with the conceptual and managerial aspects of defence procurement. He advocated the requirement of expediting procurement by improved management techniques. Important proposals advocated by the speaker are as follows:-

(a) CCS should approve projects ‘in principle’, prior to issue of RFP, thereby removing ambiguity with regard to the project.

(b) Single source situation should be forbidden to obviate corruption.

(c) Foreign Direct Investment in defence related projects should be raised from the present 29-49 per cent, thereby enabling more participative involvement of advanced defence related companies.

(d) 20-25 per cent Capital Budget should be earmarked for ‘fast track procurement’ to enable a more holistic utilisation of the allotted funds.

Address by Shri S Banerjee, Former DG, Defence Procurement

Shri S Banerjee stressed on the need to de-mystify the defence procurement procedure and enhance utilisation of Capital Budget. The speaker, after having analysed the procurement procedures in most advanced countries has recommended that the French procurement procedure is perhaps the best for Indian requirements. Based on the French model, Shri Banerjee recommended the following important changes in the procurement procedure:-

(a)  The procurement should be done by one agency which should have representatives of the three Services, MoD, Finance, DRDO, DGQA and requisite monitors.

(b) A separate acquisition cadre was proposed to acquire expertise and deal with the changing nuances of the global procedures.

Address by other participants

Addresses delivered by other participants were generally Service/procurement process specific and were more in the nature of ‘informative lecture on the subject’ rather than an incisive analysis of the subject. Hard copy of the text of their address will be submitted, if desired.

Conclusion

The Seminar commenced at the geo-strategic level and numerous important suggestions were advocated by the initial speakers. The subsequent speakers, however, dwelt more on the procedural aspects and the problems faced at the functional level. Comparisons drawn from other countries and from the corporate world yielded numerous workable suggestions, which, if implemented, may reduce delays and further optimise the Defence Budget.

(Report Compiled by Col Shantanu Dayal, Senior Fellow, CLAWS)