RTD on ‘Making Defence Acquisitions Work’

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With India’s estimated defence expenditure on capital acquisitions likely to cross over $150 billion over the next decade, the imperative to streamline India’s defence acquisition processes and making it more flexible, transparent and fast-track has been growing by the day. The release of the NDA government’s first Defence Procurement Procedure, albiet in a semi-finished state, on the opening day of DefenceExpo in Goa on 28 March 2016, was apparently aimed at sending out the right signal to the industry. It may be recalled that appendices and annexures to the DPP 2016 were added only later in the first week of June 2016, while a chapter on ‘Strategic Partners’ is still being worked on.

In order to take the process of fine-tuning the Defence Procurement Procedure forward, the VIF in collaboration with the Headquarters of the Integrated Defence Services (HQ, IDS), held a Round Table Discussion on ‘Making India’s Defence Procurement Procedure Work’ on 30 June 2016.
While the interaction among experts and stakeholders was intended to highlight complexities that still might exist in the DPP, deliberations across the table also aimed at looking at ways in which potential bottlenecks in India’s defence acquisitions could be unclogged without compromising transparency, financial prudence and probity. India’s Defence Minister Manohar Parrikar delivered the keynote address and also interacted with a broad panel of policy experts - senior bureaucrats, military’s top brass and representatives from the industry, among others. Mr. Dhirendra Singh, one of the key personalities behind DPP-2016 was among those who attended the deliberations.

In his keynote address, Mr. Parikkar admitted that while amendments brought to the DPP point to a process of evolution, the DPP 2016 significantly has sought to address an even more fundamental issue i.e. ‘changing the mindset’, an observation that can be easily related to the ‘policy paralysis’ of the previous UPA’s government.

Among other issues, the Defence Minister dwelt on the necessity of notifying ‘agents’ in various defence deals as also the guidelines being applied towards blacklisting entities that are found to be in violation of integrity clauses in defence contracts. Answering a wide range of questions, Mr. Parrikar said he is always receptive to new suggestions provided these are backed by sound facts and logic. One clear takeaway from his speech was that the Minister is taking a pragmatic approach towards both fast-tracking acquisitions as also incentivizing local manufacturers taking up projects with large indigenous contents.

In the opening remarks preceding the keynote address, General NC Vij, stressed that from a macro perspective, the DPP seems to be moving in the right direction. The nitty-gritty however needs to be worked out, especially at the functional level. Bringing up the issue of rationalising the strength of armed forces, the former Chief of the Indian Army said, in keeping view the fact that the armed forces are already stressed in terms of manpower, re-deploying the manpower would be a more rational approach rather than pruning it.

As part of the programme, presentations were made by a team of HQ IDS, comprising of Lt Gen Anil Ahuja and Cdr Vikram Mahajan. The presentations were related to the existing framework of India’s defence acquisitions – planning, budgeting, acquisition processes etc., as also the salient changes that have come about in the revised DPP. Following the presentations, an interactive session was held. A few of the proposals that emerged during the interactive session included: creation of CDS, creation of centres of excellence for field trials by private players, articulation of national security strategy, aligning long term plans with defence outlays, creation of dedicated centers for training of defence acquisition officials, among others. In his concluding remarks, the Director stated that recommendations culled from the day’s proceedings would be vetted and forwarded to the Defence Ministry for its considerations.