M K Dhar
The many defence scams having already slowed down acquisition of vital equipment for the forces, Finance Minister P. Chidambaram, in his austere Budget for 2013-14, has set his sight low in so far as modernisation is concerned by not making provision for sufficient funds. Considering the threat perception and a huge backlog of orders, a larger allocation is a critical necessity to make up the deficiencies in equipment and ammunitions and technological upgradation of weaponry to strength the country’s capabilities to deter aggression and to ensure peace along the long and porous borders. This is despite the Defence Minister A. K. Anthony’s promise to fast-track arms acquisitions, as well as, boost infrastructure development along the borders, particularly to the north, for quicker mobility of troops and weaponry.
Though the Defence Budget for the next fiscal is proposed at Rs. 2.03 lakh crores — a modest increase over the current year — it has fallen to 1.79 per cent of the Gross Domestic Product from a high of 2.2 per cent in 2009-10 and 1.92 per cent in 2011-12. The Ministry also affected a cut of Rs 14,000 crore last year, most of which — Rs 10,000 crore — had been earmarked for procurement of new defence systems. Mr. Chidambaram has, no doubt, assured availability of additional funds if need arises, but the way things have been going for some time, the scams have almost blocked new acquisitions, leaving the country’s preparedness in a precarious state. For instance, uncertainty hangs over procurement of long-range guns to supplement and replace the ageing Bofors, M-777 light howitzers to be bought from the United State and the artillery modernisation Programmes, including indigenous manufacture and frontline new generation fighter Rafale from France.
There is no doubt that the global economic forecast remains gloomy and is already impacting India as well, having brought down our economic growth rate to just 5 per cent this year as well as, the government’s revenues. But, considering the growing threats to India’s security, the people are willing to sacrifice a little in order to raise money for providing the forces with the latest and best equipment. If additional mobilisation to meet the critical requirements becomes necessary, the Government should not hesitate to undertake it. The Budget allocation is lower, not only terms of ratio to GDP, but also as percentage of total government spending. The defence Budget is 12.33 per cent of the estimated government expenditure in 2013-14, lower than 15.79 per cent in 1999 and also the current year’s 21.97 per cent. The allocation for purchase of new equipment is Rs 86,740 crore, an 8.2 per cent increase over the current fiscal, but inadequate considering the equipment on order, or for which procurement must take place on an urgent basis.
The hardest hit will be renovation of the naval fleet, reduced by over 13 percent, raising questions on several acquisitions including new generation conventional submarines. The acquisition of new air defence systems is also expected to be hit due to the scams with delays in finalising contracts and conducting negotiations. The biggest order likely to be delayed is multi-billion dollar for purchase of 126 new generation French fighter Rafale, though it has been already short-listed. It remains to be seen if a modest increase of Rs 10,000 crore in the capital budget over last year’s will cover the first payment for Rafale. The Army’s acquisition of 197 new light helicopters to replace the Cheetak fleet may be cancelled in view of the cuts, leaving minimal scope for new acquisitions.
The Parliamentary Standing Committee on Defence too had identified issues like swifter procurements, modernisation of industries, functioning of cantonments and stations, cyber security, modernisation of military airfields, service matters etc for review. Speedy defence procurement is a major challenge faced by the Armed Forces and the country, on an average spends Rs. 53,000 crores on this account every year. India has a long land border of about 15,000 km with Pakistan, Nepal, Bhutan, China, Bangladesh and Myanmar and a small length of about 106 km with Afghanistan (in the now Pakistan-occupied part of Kashmir). The country’s coastline extends to nearly 7,500 km and it was only after the 26/11 terror attacks on Mumbai in 2008 that India began to strengthen its coastal security, which still remains in elementary stage, with much more to be done.
China, which is India’s biggest and economically more powerful neighbour, raised its defence spending by 11.2 per cent last year, taking its annual military spending beyond $ 100 billion, as it goes ahead with plans to modernise its armed forces. It has a heavy concentration of troops and missiles in Tibet and, to add to India’s difficulties, continues supplying defence equipment, including fighter aircraft, missiles, tanks and other items to bolster Pakistan Army’s capabilities against India. Thus, while planning for defence requirements, India has to reckon with a heavily armed China, as also fully equipped Pakistan Armed Forces, which, apart from being the recipient of China’s largesse, continues to get the latest American equipment (after a short suspension) but even pending orders are being fulfilled, ignoring India’s entreaties that these arms are meant to be used against it and none else.
The Defence Minister may be right in insisting that the maximum defence equipment should be procured through domestic production, but he forgets that indigenisation is proceeding at a very slow pace, leaving no other option but to procure from foreign sources. The latest technology is not so easily available and the Defence undertaking cannot go on manufacturing outdated equipment, which is as good as useless in the field. Though the Budget makes allocations for the Defence Research and Development Organisation, it is unable to utilise the funds for want of technology available and expansion of manufacturing capacity.
The best way would have been to involve the private sector in manufacture of defence equipment with assured orders, which would take the burden off the exchequer. But, this is not happening, despite all talk of allowing private players to step up investment in a big way if India wants to become an aerospace and other defence equipment manufacturing centre. Even the Finance Minister recently noted that the indigenous advanced light helicopter, intermediate jet trainer, light combat helicopter and basic trainer aircraft are still at the stage of design and development. The main battle tank Arjun was inducted into the Army in 2004 after many years of development and failure to procure an engine which would deliver sufficient horse power, and the next model is still years away.
Hence, import of the best possible equipment becomes inevitable for upgration of what is available with the three services, which are repeatedly complaining of obsolescence of their equipment, shortage of ammunition and spares and delays in getting the best weaponry to deter the threat from potential adversaries. Of course, kickbacks have plagued procurement and should not be allowed, but as long as the equipment satisfies the technical requirements and is needed by the forces, it should not be rejected outright. As many as six major defence suppliers have been blacklisted for 10 years, which has slowed down and stalled the search for many items, including modern artillery.
Cancelling, banning and blacklisting indiscriminately, instead of applying more specific penalties and correctives in cases of proven wrong doing, end up reducing the number of options in the market and increasing the chances of the Defence Ministry being left to deal with a single vendor. Fines can be imposed and guilty persons punished and the defence procurement system made more transparent and private players allowed a level playing field. We just end up delaying defence procurement and are often forced to make compromises to buy second-rate items. (IFS)
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