What is needed is rationalisation of defence procurement procedure to make it not only more comprehensive but also simple and user-friendly

Do we need an international consultancy organisation to remind India’s Defence Ministry the pathetic state of it’s defence arsenal? Keeping in view the snail’s pace at which the armed forces’ capital acquisition and modernisation programmes are moving forward, it is not surprising. In a recent report, prepared jointly by the global consultancy firm KPMG and the Confederation of Indian Industry (CII), it is revealed that at present only 15 per cent of India’s defence equipment is state-of-the-art and at least half of India’s defence equipment is totally obsolete needing urgent upgradation. The report is a sad commentary on the state of affairs and highlights crucial gaps in India’s defence preparedness, especially so, when the region is roiled by unprecedented militancy and military rivalries.

During the Cold War, India largely remained aloof from any military equation with the western world. However, this was adequately compensated by the strategic partnership with the then Soviet Union. Moscow had a strategic vision that embraced India as a dependable partner in the larger matrix of East-West confrontation and therefore gave India the status of ‘most favoured nation’ in every defence related area. However, two factors very quickly and drastically changed this time-tested equation—the collapse of the Soviet Union in the early 1990s and, coinciding with the breakup of USSR, the near-bankrupt situation in the Indian economy. This had the obvious adverse effect on the Indian armed forces which could not keep pace with the equipment obsolescence and shortages due to paucity of resources.

However, the new millennium has ushered in an era of economic growth with resultant positive effect on India’s defence budget. Responding to the emerging security paradigms coupled with substantial economic growth rates, India has now decided to shore up its armed forces with new and diversified capital acquisition and modernisation programmes. And even though India’s defence budget remains less than 3 per cent of its GDP (one of the lowest in the world in percentage terms), it has become one of the leading defence spenders globally. Also because of the underdeveloped indigenous defence industry, it is ranked amongst the top five importers of defence equipment in the world.

In pursuit of the government’s twin objectives of timely procurement of defence equipment and bringing about total transparency to root out bribery and corruption in defence deals, the Ministry of Defence (MoD) came up with a unique Defence Procurement Procedure (DPP) manual in 2006, which was revised in 2008. It is undergoing further refinement in 2010. But even though the government has been vocal about speeding up the procurement process laid down by the DPP by removing impediments and making the process transparent, the ground reality is vastly different as there is incorrigible mismatch between the planned and actual timeframes required to complete all stages of the procurement process. Inclusion of numerous players in decision- making at all stages of selection, testing and negotiations, ostensibly done for the sake of transparency, actually results in massive delay in time. This arrangement not only reduces objectivity of the process, but in addition creates space for red tape, making the entire exercise complex and unpredictable. It also gives room to the agents of the competing companies to lobby hard and create undue influence in the corridors of power.