Need to Clean Up the Augean Stables of Defence Acquisition

Radhakrishna Rao, 

Visiting Fellow, VIF

The commitment of the Narendra Modi Government to the ushering in of self-reliance in India’s defence sector, which under the ten years long, lack lustre UPA(United Progressive Alliance) dispensation had got enmeshed in corruption, bureaucratic indecision, tardy and questionable acquisition process as well as scams and scandals of staggering proportions, should be the right starting point for initiating the process of building a vibrant Indian military industrial complex which will not only meet all the needs of Indian defence forces but also transform India into a major player in the global defence hardware market place. That today India, an emerging technological power with a globally recognised resurgent IT and software services industry, is the largest importer of arms and ammunition, only goes to show that there is something seriously and fundamentally wrong with the defence production scenario of the country.

Indeed, the complex systemic problems associated with India’s defence production matrix need to be fixed immediately. Since the shocking eruption of the Bofors scandal in mid-1980s, that stirred a big political storm in the country, the entire defence procurement mechanism of the country came under the spell of “lethargy, indecision and delay ” with serious consequences for the combat readiness of the Indian defence forces. In fact, the defence procurement procedure of the country is yet to come out of the “Bofors syndrome”. What’s more, over the last one decade or so, the defence procurement in the country became synonymous with ‘scams and scandals’ involving shady middle men keen on promoting a culture of “corruption, kickbacks and impropriety”. In the national interest, the kind of political and bureaucratic support these middle men received need to be probed thoroughly. The consequent loss caused to the national exchequer on this score is simply mind-boggling and phenomenal. On the other hand, it has gone to sully the the country’s fair image and caused enormous damage to the efforts towards defence self reliance.

The cancellation early this year of the US$770- million deal for acquiring 12 VVIP helicopters from Anglo-Italian enterprise Agusta Westland without blacklisting the vendor following the exposure of the massive kick back has shocked the Indian defence set up as never before. But as has been the case with most other defence scams and scandals that preceded the Agusta Westland episode, the middle men responsible for “corruption, string-pulling and impropriety” will go unpunished. It is here that the new ruling dispensation should blaze a trail by bringing the guilty to the book that would ultimately act as a deterrent for the recurrence and repetition of such “despicable phenomenon” associated with defence procurement. At the end of the day, self reliance in defence production could alone prove effective in putting behind all the negative features including scams and scandals associated with defence equipment import.

Not surprisingly then there is a growing demand to investigate the silence and indifference of the former Defence Minister A K Antony towards rampant corruption and shocking acts of impropriety in India’s defence acquisition. For as Defence Minister Antony had a constitutional obligation to ensure total transparency and rectitude in the defence procurement programme of the country involving massive financial outlays. This is an area where Antony did fail miserably and shockingly. Of course, Antony’s clean image and integrity has never been in doubt. But that he could do very little to stem the rot of corruption, kickbacks and wrong doings associated with the defence procurement hardware which left the defence ministry in shambles and defence forces without many of the vital fighting equipment is now a part of the history. No wonder, there is a growing clamour for probing the glaring failure of Antony to protect national interests and his conspicuous inaction in so far of bringing the guilty to book was concerned.

According to the public audit watch dog, PAC (Public Accounts Committee), the defence procurement systems and procedures that existed at the time of approving various contracts pertaining to the Ordnance Factory Project at Nalanda were beset with glaring loopholes and lacunae to the serious detriment of national interest. Rightly and appropriately, the PAC headed by M.M.Joshi has warned that “without remedial measures, future defence procurements would continue to be clogged with omissions and commissions leading to the scams to the grave peril of the nation”. About the Nalanda Ordnance Factory project, the PAC said that the it was perturbed to note that Ministry of Defence did not try to prevent the recurrence of acts of omission and commission committed in defence procurements causing huge and recurring but avoidable loss to the public exchequer. Of course, the contract with Israel Military Industries (IMI) for Ordnance Factory Project was subsequently terminated.

A the end of the day, Antony’s keenness to promote transparency and end corruption in defence procurement only contributed to the black listing of overseas vendors with serious consequences for the acquisition of defence hardware. To compound the already complicated situation, the obsession of the UPA-II to rush through a series of ” unproductive populist schemes” whose benefits could hardly reach the targeted population, implied that the budgetary provision for the purchase of defence hardware came down by a substantial extent. While the Finance Commission has been in favour of a defence budget to the extent of 3% of the GDP (Gross Domestic Product), the budgetary outlay for defence is now less than 2% of the GDP. In distinct contrast, China has already hinted that it would boost its current annual defence budget by more than 10% with immediate effect. The political dispensation in New Delhi should look at the issue of the budgetary outlay for the defence sector to sustain and support India’s defence preparedness in the context of the extremely disturbed security environment in India’s immediate neighbourhood.

Delay, indecision and lack of clarity in defence procurement have gone to seriously erode the combat fitness of the services. For instance, even as Indian Air Force( IAF) continues to be handicapped by the problem of squadron depletion, the deal to acquire 126 Rafale fighter from France could never be finalised even two years after the aircraft emerged a winner in the closely contested Medium Multi Role Combat Aircraft( MMRCA) tender. Incidentally, while IAF has sufficient number of heavier Su-30 MKI combat aircraft and the lighter Mirage-2000 and Mig-21 Bis in its fleet, it is lacking in medium range multi- role fighters.

Similarly, the Indian Navy which has an ambitious plan to position itself as a blue water maritime force, is seriously handicapped by the depletion of its under water arm .It is decades since the Indian Government gave its nod for a long term submarine construction programme under Project 75 involving the building of 24 submarines in India. However, only six are now being taken up for construction at the Mumbai based state owned Mazagaon docks. And the plan to build six more subs with advanced Air Independent Propulsion (AIP) is awaiting clearance from the government. This will enable the submarines to stay submerged for longer periods of time. Currently, none of the submarines in service with the Indian Navy has an AIP system on its board. ”The submarine construction plan has to come back on the priority list. Also our dependence on Russia should come down as the Russians have a weak and corrupt supply system” says former Navy Chief Admiral Arun Prakash. The new ruling dispensation in New Delhi should immediately review the need for strengthening the submarine fleet of the Indian Navy followed by a time bound action to strengthen the undersea arm of the Navy which happens to be the youngest of the three services.

Similarly, the proposal for the acquisition of 197 light observation helicopters for the Indian defence forces, which was taken up more than a decade back need to be given a practical shape without a loss of time. And the Indian Navy’s plan to acquire 16 multi role helicopters has been in limbo for more than a decade now. About the artillery acquisition programme of the Indian Army, the less said the better. Ever since allegations surrounding the Bofors deal came to the fore, India has not bought a single artillery piece for its armed forces. The Indian Government should fast track the acquisition of various types of artillery systems projected by the Indian Army to boost its fighting fitness. Beyond this, in the immediate future, there should be a serious study and evaluation of various proposals for the acquisition of defence hardware that are already in pipeline.

Simultaneously, the indigenous production of defence equipment should receive the top most priority. Some of the concrete steps could be ending the state monopoly over the defence production, incentivising and encouraging the Indian private enterprises to participate in defence production, creating conditions conducive for the foreign defence companies to invest in India so that Indian partner companies will be in a position to acquire latest genre technologies as well as the skill for precision manufacturing. However, for the private industrial outfits in India to become a part of the defence production scenario, there is a need for the Government to ensure that the entire exercise will be an economically viable option for the participating industries. Similarly, the Defence and Research Development Organisation (DRDO) should be directed to focus on high end research and development by stripping it of any role in system production. It is here that increased industry participation would help DRDO concentrate on research and development. Further, services should be mandated to actively participate in research and development activities of DRDO for the development of technologies that are well suited for ground level operations. Before taking up the development of any fighting equipment, the services should be made to commit on buying them.

Meanwhile, there is a feeling that from the strategic viewpoint, it would be a good idea to have a tri service commander who will serve as a bridge between the three services for the efficient and effective use and coordination of resources and expertise at every stage of joint operations. Indeed, the ambitious plan for mountain strike corps meant to take on Chinese threat, seems to be in need of rigorous, tri service evaluation to check whether China could be deterred through alternative means including the blockade in the vulnerable Malacca Strait or a tactical missile strike in Tibet. Indeed, this aspect should receive proper and immediate attention from the new Indian Government. More importantly, without succumbing to pressure from any quarter, the political dispensation in New Delhi should hasten the process of giving a green signal to the creation of a tri service aerospace command that could also draw on the resources of DRDO and ISRO (Indian Space Research Organisation).

There is now all round recognition of the ground reality that gaping holes in India’s defence preparedness could prove catastrophic in the context of China forging ahead with massive augmentation of its combat capability in all its manifestations. The indifference, ineptitude and decision gird-lock that marked the functioning of the UPA-II government has proved to be a major stumbling block in India’s military modernization programme supported by a technological upgradation process. A new national security agenda taking into account the external threat as well as internal terror and insurgency should be put in place immediately and given a practical shape without any further loss of time.

As it is, the 1.13-million strong Indian Army, considered the third largest in the world, has pitched in with a blue print of a massive investment to overcome the slippages and shortcomings of critical nature. The Indian Army Chief General Bikram Singh has already made it clear that his top most priority is to hon and fine tune the army’s “operational readiness” through a rigorous modernization process. Not to be left behind, both the Indian Navy and IAF need to address the problems of deficiencies and shortcomings on both tactical and strategic fronts to stay at the winning edge of the battlefield.

According to Defence analyst Brig (Rtd) Rahul Bhonsle, “the new government should address the systemic inadequacies and archaic procedures of doing business within the armed forces as well as with the Ministry of Defence, DRDO et.al, increase the defence budget for acquisitions and establish a genuine level playing field for private sector participation”.

Cleaning up the mess, cobwebs and dirt surrounding the defence procurement procedure should be the top most priority of the Narendra Modi led Government. Of course, this should be followed by vigorous and multi faceted efforts to acquire self reliance in all aspects of defence research development and production by exploiting the synergy cutting across the of public-private sector jurisdictional boundaries and exploiting the expertise and resources available in the research and academic institutions spread across the country. More importantly, services should be asked to play a proactive role in the indigenous development of products and systems. Services should be told in no uncertain terms that there is always a home grown alternative to the “glitzy fighting equipment” touted around in the global defence market. Of course, the path of indigenous development is strewn with problems and challenges. And India which has sent a probe to Mars and successfully developed and flight tested a cryogenic fuel driven launch vehicle has the expertise, resources and talent to create a self reliant base for defence production. What was so far lacking was the political commitment which the new government can chip in without any hesitation.

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Published Date: 27^th May 2014, https://farm8.staticflickr.com/7206/7038621421_21739c54ac_o.jpg

Turning India into An Aerospace Power House to end Defence Import Scams

Radhakrishna Rao 

(Research Fellow, VIF)

Frequent eruption of scams and scandals surrounding India’s high profile defence acquisition programme, besides delivering a severe blow to the defence preparedness of the country, has brought into sharp focus the abysmal failure of the country, boasting one of the largest pools of scientific and technical manpower in the world, to develop a strong and versatile indigenous base for defence and aerospace production. Against this backdrop, the exposure of the massive kickback involved in the Rs.36,000-million deal for the acquisition of 12 VVIP helicopters from Agusta Westland, a wholly owned subsidiary of the Italian firm Finmeccanica, in which the Italian Government holds 30% stake, has sent shock waves through the defence setup and political establishment of the country. Indeed, while replying to the searching queries of the agitated members in the upper house of the Indian Parliament (Lok Sabha) Indian Defence Minister A.K. Antony was at pains to explain that India is forced to import defence hardware to meet the immediate operational requirements of the Indian defence forces and that the defence self reliance would be stepped with a greater vigour to end Indian dependence on imported hardware and equipment.

Of course, Indian Defence Minister A.K. Antony, known for his clean image and impeccable personal integrity, has asserted that no mercy will be shown to the “guilty and wrong doers”. Rightly and appropriately, Antony gave a philosophical edge to this unsavoury episode by his observation that “there was no end to human greed and still greedy people were working around the world”. But then the moral of the story that had gone sour is that India’s continued dependence on overseas vendors for meeting much of its defence requirements is at the root of “impropriety and corruption” associated with the defence procurement programme. Indeed, as one defence analyst has put it, boosting domestic defence and aerospace production base holds the key to end the lurid saga of kickbacks that have became an integral part of the defence import. Indeed, Antony has been making use of every platform to urge the state owned Defence Research and Development Organisation (DRDO) to acquire the latest technological expertise to reduce Indian dependence on foreign vendors for defence and aerospace products.

Yet another disclosure by Antony in Lok Sabha has the potential to generate a debate on the need to undertake costly upgrades of old aircraft platforms instead of going in for new platforms. The crux of Antony’s statement in Indian Parliament was that the cost of upgraded and modernized French origin Mirage-2000 aircraft in service with the Indian Air Force (IAF) could be close to its shelf price if India wished to buy these aircrafts afresh now. As it is the cost of upgrading one Mirage-2000 fighter works out to Rs.1950-million. India had signed a Rs.109, 470-milliion contract with France for upgrading the Mirage-2000 fleet way back in 2011. Incidentally, India had purchased 51 Mirage-2000 fighters way back in 2000 with per piece price of Rs.1, 300-million. The whole episode is a tribute to the poor home work done by the Indian Defence Ministry which should be more circumspect while committing public money for defence acquisition and up-gradation programmes, some of which are really questionable. It is high time the Indian Defence Ministry fine tunes its strategy for “getting right type of equipment at right time in right place.” Of course, inordinate delay and cost escalation continues to remain the scourge of the Indian defence procurement programme right from the word go.

Unfortunately, India has notched up the dubious distinction of being the world’s largest importer of defence equipment constituting about 10% of the global arms import between 2007 and 2011. In its 2005 report on defence acquisition, the Vijay Kelkar Committee quoted that a just 25% reduction on foreign dependence will lessen foreign exchange outgo by around Rs. 85-billion. For long, the Indian defence production sector has been dominated by the state controlled defence public sector undertakings (DPSUs) including HAL and BEL (Bharat Electronics Limited), the Ordnance Factory Board (OFB) and various laboratories forming part of Defence Research and Development Organisation (DRDO) with very peripheral role for the private sector industry in the exercise of producing hardware and equipment for the Indian defence forces.

Of course following the opening up of the defence and aerospace sector for private participation, a greater role for India’s privately held entities in the defence production sector is being envisaged. For instance, in a major departure from the conventional approach to defence production and acquisition, Indian Defence Ministry would soon issue a Request for Proposal (RFP) to a number of private Indian enterprises including Reliance, Tata, Larsen and Toubro and Bharat Forge, for the production of 56 aircraft in six-to eight tonne class. This aircraft, which will replace the vintage Avro planes in service with the Indian defence forces, will have a cruise speed of 800 kmph and a range of 1500-km to 2700- km. As envisaged now, it will have far superior features in comparison to Avro. However, in the backdrop of the fact that the Indian industry has a very poor track record in the design and development of flying machines, they will be required to join hands with an established global aircraft major that will do the necessary hand holding in producing this aircraft which IAF badly needs as a replacement to Avro. The idea of IAF that Avro replacement project should be handled by the Indian private industry rather than HAL augurs well for giving a boost to the Indian aerospace capability in all its manifestations.

And in what can considered a shot in the arm for India’s defence indigenization programme, an Indian version of the Swedish 155-mm Bofors Howitzer, whose acquisition by India in 1980s, had created a big political storm in the country, is to be produced by OFB. As it is, during 1999 short lived Kargil skirmish, Bofors gun had proved its mettle through the lethal fire power. The Indian Defence Ministry has placed an order worth Rs.12, 600-million with OFB for the procurement of 114 of the artillery guns being developed based on the designs obtained under the transfer of technology provision as part of the Bofors contract signed in 1986. This exercise would give India a required level of confidence and expertise to design and develop futuristic, advanced howitzers required by the Indian army.

During his inaugural address at the Aero India-2013 show held in Bangalore in February this year, Antony was quick to point out that the country should harness all options including public-private participation(PPP), joint ventures, licensed production and technology transfer to attain self reliance in all the conceivable areas of aerospace and defence production.” Zero import is not possible but maximum equipment should be indigenous. We will have a second look about our defence production as well as procurement policy so that we can speed up indigenisation on time,” was the observation of Antony. The defence procurement policy was revised as early as 2011.

Air Marshal S. Sukumar, Deputy Chief of the Air Staff, Indian Air Force (IAF) while addressing the seminar “Rising with collaborative Opportunities” held as part of Aero India-2013 stated that the need of the hour is to boost the capability levels of IAF through an increased indigenous efforts in the defence and aerospace sectors of the country. Giving details, he said many Indian companies have successfully developed critical components and subsystems for many of the end products required by IAF. They include helmet mounted displays and transmit and receive modules. Home grown fourth generation supersonic fighter aircraft Tejas LCA(Light Combat Aircraft) and Indo-Russian supersonic cruise missile BrahMos stand out as classic examples of India’s growing prowess in aerospace and defence sectors.

According to Sukumar, a highly skilled, cost effective manpower pool and vibrant software and IT industry could be the major drivers of the indigenisation. There is no denying the fact that India’s prowess in Information Technology (IT) and software services industry is today recognised across the world. The striking feature of India’s IT and software success story was that, to a large extent, it was scripted by a smart group of visionary private sector entrepreneurs keen on entering the global market by exploiting the “low cost advantage” offered by India. Apparently, the Government stepped in subsequently as a facilitator to give a boost to the IT and software sector through a series of incentives and concession even as the initiative continued to be in the hands of the private sector entrepreneurs. Of course, it must be said to the credit of Government of India that it played a crucial role in introducing and popularizing the concept of Special Economic Zone (SEZ) and exclusive Technology Parks to give a” fresh thrust ” to the “human intensive” IT and software enterprise and take it to the “next level of growth”. What is more, this development implied that the scope of SEZ and technology parks was extended to embrace other nationally important sectors including aerospace and automobile industry.

Needless to mention, India’s aerospace industry is much older than its IT and software sector. The origins of the Indian aeronautical enterprise goes back to early 1940s when the visionary industrialist Walchand Hirachand established Hindustan Aircraft Company in Bangalore with a view to produce military aircraft for the then Royal Air Force. But despite such an impressive legacy, India’s state owned defence enterprise Hindustan Aeronautics Limited (HAL) could not achieve the kind of stature that country’s much younger IT and software industry could attain. That the Indian aerospace products and services account for less than 1% of the rapidly expanding multibillion dollar global aerospace market is in itself a telling commentary on the failure of the country to build up a “vibrant and versatile” aerospace industry base and position India as major aerospace hub of global standing.

Why HAL could not blossom into an enterprise on par with Brazilian Embrarer is a question that needs immediate and serious consideration. On another front, if the Indian Space Research Organisation (ISRO) could pull off a space spectacular in the form of Chandrayaan-1, India’s first mission to moon, what prevented HAL, which is much older to ISRO, from positioning India as a high profile aerospace nerve-centre is an issue that needs to be deliberated upon with all the seriousness it deserves.

Not surprisingly then Antony has chided HAL from various platforms for the “the delay and time slippages” in realizing many of the nationally important programmes. What is more, during Aero India-2013 held at Bangalore in February this year, IAF Chief Air Chief Marshal N A K Browne had stressed the point that the Intermediate Jet Trainer (IJT) being developed by HAL which is behind schedule by at least one decade, had serious problems with its engines and as such cannot be accepted in the current configuration. Further, Browne also made the point that HAL’s planned basic trainer would cost more than Swiss made Pilatus, 75 of which have been purchased by IAF. This implies that HAL would need to be serious about sprucing up its act and positioning itself as a dynamic, forward looking, aerospace entity capable of providing a serious competition to global aerospace majors.

There is no denying the fact that the virtual monopoly of HAL on India’s aerospace and defence sectors-- till a decade back when Government opened up the defence production for private participation-- was partly responsible for the sense of “complacency and smugness” permeating the vitals of this leading aerospace enterprise in South Asia. Indeed, lack of competition meant a slow and steady growth of “lethargy and incompetence” with serious consequences for nurturing the “creative talent” that HAL had in abundance. Similarly, bureaucratic interference, stranglehold of the defence establishment obsessed more with meeting its requirements than developing a home grown technology base as well as the denial of freedom for HAL to move ahead with new and innovative projects meant “creative thinking and spirit of innovation ”could no longer be sustained. Indeed, the poor performance of HAL over the years was the result of a variety of factors beyond its control. Though Government of India is planning to restructure HAL by diluting its own stake in the company, whether this move will lift this Indian aeronautical giant from its current state of mediocrity no one is sure as yet.

Further, the route of licensed production that HAL chose with a view to honour the contracts from the Indian defence forces in a timely and economically viable fashion proved to be its own undoing. For such a step resulted in the stifling of “talent and expertise” required to build up a home-grown design, development and manufacturing capability for producing a range of aircraft, helicopters and advanced aerial vehicles. Moreover, the sustained neglect of civil aviation and narrow focus on defence aerospace points out to the serious blunder committed by HAL. For civil aviation and defence aerospace have many common and shared technological elements from which HAL would have derived a synergy to build up a total aerospace eco system to position itself as a “globally competitive aerospace enterprise”.

The ground reality is that India would need to look beyond HAL to give a “new dimension and wider reach” to its aerospace sector. It is here that the SEZs could be developed as a “force multiplier” for the national aerospace enterprise which would need a global reach to survive and thrive. Through its integrated and state of the art facilities and human expertise and domain skill spanning a wide range of areas critical to defence and aerospace production, an aerospace SEZ can position itself a full-fledged high tech eco system capable of meeting the diverse requirements of a variety of customers from across the world.

India’s first aerospace SEZ at Hattargi near Belgaum in Karnataka promoted by QuEST Global is designed to serve as a well equipped eco system offering complete “design to build” services, right from the concept design to the final, finished product meeting the stringent international quality standards. The strategic advantage of having players across the value chain in the same location would be the amount of time saved in moving parts from one location to another as well as the associated cost of logistics.

Significantly, locations such as Wichita in USA and Toulose in France matured into widely patronised aerospace hubs through the dynamics of “cluster phenomenon”. Aerospace focussed SEZs with an eco system built around a full-fledged supply chain cluster could easily meet the diverse needs of a customer at one location, thus helping him save time, money and energy required to source his requirements from widely dispersed geographical locations. But then instances of SEZs falling by wayside after the real estate interests taking un upper hand are dime a dozen.

As things stand now, not even the sky seems to be the limit for the Indian aerospace sector. But then for the Indian aerospace sector to emerge as a major and serious player on a global scale, the country would need to bring about paradigm shift in the way the entire aerospace sector in run. A beginning towards this long journey could be made by accelerating the process of setting up a large number of aerospace SEZs with a deep domain knowledge and precision manufacturing capability.

Defence Procurement: Would You Do Business With India?

Dr M N Buch 

(Visiting Fellow, VIF)

Ever since we became independent we seem to be lurching from one crisis to another in any matter which concerns a deal or a transaction in which we make purchases or where decisions are taken regarding business. One harks back to the scandal attributed to the purchase of jeeps when Krishna Menon was High Commissioner in London. The most celebrated scandal in this behalf was the purchase of 155 mm guns from Bofors, a Swedish arms manufacturer renowned internationally for the quality of the product produced by the company. The Bofors anti aircraft gun of 40 mm, the Bofors quick firing gun version mounted on small naval vessels were the mainstays of most of the Allied Forces and even today the Bofors anti aircraft guns are widely used. The 155 mm gun is of such a superb quality that it could virtually dominate the Kargil battlefields and was a major factor in our being able to dislodge the Pakistanis. However, the purchase agreement was befouled by allegations of bribes being given by the suppliers through an Italian agent, in which the name of Rajiv Gandhi was also mentioned by V.P. Singh. The amount of bribe was Rs. 64 crores. Rajiv Gandhi denied any wrongdoing, V.P. Singh never produced any evidence which could have clinched the matter, CBI utterly failed to unearth irrefutable evidence and Quattrochi, the Italian agent, could never be brought to book. What resulted was that we virtually black-listed Bofors and every effort to purchase more guns to strengthen the artillery has been aborted by allegations of corruption, leading to blacklisting of almost all the manufacturers of a gun of this calibre and quality. The tragedy is that Bofors, despite all the mud slung at them, completed its part of the transfer of technology by making available very detailed drawings of the gun. These lay gathering dust in the Defence Ministry, despite the fact that the Ordnance Factory Board kept telling government that it could manufacture the gun on the basis of these drawings. Manufacture could have started at least eight years ago and by now the indigenous gun could have been in service with the Army. One allegation of corruption, which never led to any viable action against the persons named as the culprits, has left the Indian Army in the unenviable position of not having added a single worthwhile gun in over twenty years.

The acquisition by purchase or indigenous manufacture of warships upto the destroyer class by the Navy has had a relatively better record than weapon acquisition by the Army or the Air Force, but in terms of under water capacity the Navy has not advanced at all, whether it be the French Scorpene submarine or the German HDW. The Navy has been able to make very little progress because we just do not take any decisions in order to avoid complaints. Despite this there are serious allegations of financial irregularities. By now we should have had at least fifty submarines, including at least four or five nuclear submarines, but all we have managed is one nuclear submarine on lease from Russia and one indigenously manufactured nuclear submarine whose sea trials have yet to be conducted. Our lone aircraft carrier is now obsolete and its replacement, INS Vikramaditya (formerly Admiral Gorshkov), has had a 250 percent increase in cost and will not be delivered till the end of 2013, five years behind schedule. The keel of the indigenous aircraft has been laid but it is unlikely to be in service till 2017. Meanwhile China has acquired and put into service one aircraft carrier bought from Ukraine and is in the process of manufacturing one more carrier. Without a strong submarine fleet equipped to fire nuclear tipped missiles we cannot really boast of having a sea-land-air based nuclear deterrent in place. Those who are responsible for decision making must realise that in an environment in which our two chief opponents, Pakistan and China, have nuclear weapons and some delivery systems to target Indian cities, our delaying of decisions of purchasing or manufacturing necessary defence equipment has left the nation precariously vulnerable.

The cause celebre is a relatively minor acquisition of twelve helicopters for carriage of VVIPs. The proposal has been mooted by the Air Force about fifteen years ago because the MI8 helicopters on VIP duty are now totally obsolete, difficult to keep airborne and really not in a position to safely carry dignitaries such as the President and the Prime Minister. It was initially mandated that the new VIP helicopters would have an operational ceiling of 18,000 feet and the specifications were drawn up accordingly. Only one helicopter, the Eurocopter 200, could attain this height and this narrowed down the purchase to a single vendor. The then National Security Adviser, Brajesh Mishra, pointed out the unacceptability of a single vendor. The SPG, which guards the Prime Minister, also objected to the cabin size and said that it would not be in a position to protect the VIP unless the cabin specifications were changed. Therefore, the NSA recommended that the matter be re-examined. The file was shunted back and forth for at least five more years. Ultimately the Air Force recommended new specifications, lowering the ceiling to 15,000 feet and also stating the size and the layout of the main cabin. Now four firms give their tenders. Had the specifications not been changed the order was not large enough for any firm to change the aircraft design and also restructure the production line as this would be uneconomical. Therefore, there was no alternative but to change the specifications. It is now alleged that bribes were paid to the cousins of the Chief of Air Staff and, therefore, there was the suspicion that the specifications were altered to suit one company only, Finmeccanica, which manufacturers the Agusta Westland helicopter. The amount of bribe is stated to be in excess of Rs. 360 crores.

The above allegation is based on the statement said to have been made by two officials of Finmeccanica who were arrested in Italy on a complaint alleging corruption in the Indian transaction. No one has said that the process whereby the Agusta Westland helicopter was finally selected was in any way wrong. It is not alleged that technically and financially the best bid was not that of Finmeccanica and Russian and American (Sikorski) bids were wrongly rejected. The adherence to prescribed norms of the Agusta Westland helicopter has not been questioned, nor has its performance. It has also not been alleged that had the bribe not been paid the helicopter would be cheaper to that extent. Had this been stated then it would have meant that we were being overcharged in order to pay a bribe.

What has been the Indian reaction? The media, print and electronic, have virtually gone berserk in sniffing out and unearthing wrongdoing in the instant case. Television anchors wave papers on the screen and state that these give proof positive of wrongdoing in the helicopter deal. From this these anchors deduce that other deals not connected with this particular purchase also are suspect, that bribes have been given and that either because the same agent figured in more than one case, or because the supplying company was the same, every defence deal is based on corruption. What is written in those papers is never shown, nor is it categorically stated that they constitute the totality of documentation, nor is their any real attempt to prove that the so-called papers, which form part of a larger whole, are being read in context. Selective display of documents or use of words can be very dangerous. One recalls the story of the Giant Panda who walked into a restaurant in New York finished his meal, took out a revolver, shot dead the restaurant owner and left without paying for the food. When arrested he said, “Have you not read what we Pandas do? A Panda eats, shoots, and leaves”. Delete the commas and this would read “A Panda eats shoots and leaves”. Our Indian scribes, unfortunately, believe in retaining the commas in the above sentence, which not only changes the meaning of the context but also leads to very dangerous conclusions. There is no need to be judgemental about an issue because some television anchor waves papers in the air, pontificates holily about the evidence of wrongdoing that he has and then tries to browbeat people into saying ‘mea culpa’. If there is wrongdoing let it be investigated and the accused brought to trial. That trial will be in a court of law, not in a court of journalism.

To return to the helicopter purchase case, the need for new helicopters is amply proven and requires no clarification or elaboration. Changing of specifications, which would be universal and not confined to benefiting a particular manufacturer, is not only permitted but is normal. If the tender procedure is transparent, if bids are duly received and are examined impartially, if the product is what we need, if the price is acceptable, then the deal is complete and must be given effect to. If there are allegations that despite precautions bribes have been given, let the complaint be investigated and if a prima facie case is made out, then the accused persons must be brought to trial. However, the acquisition should be completed because it does not make sense to foreclose on a deal which is beneficial to India.

The Indian Air Force has been trying desperately to find a multi-role combat aircraft. The process of specifying norms, performance parameters, etc., has been long drawn out and the Air Force has virtually tested every alternative almost to destruction. Optimising the performance index of the aircraft, its lift and delivery capacity in the matter of weapons, the transfer of technology and the possibility of future total indigenisation, the maintenance schedule and cost, as also the operational life of the aircraft, the Air Force found the Dassault Rafale aircraft to be best suited to our needs. The American F16 and F18, The Anglo German Eurofighter and the Russian MIG-35 did not come up to the mark and were rejected. The technical and financial bids were taken into consideration when making a final selection. Over a year has passed and we have still not signed the final agreement. Meanwhile our television channels have tried to find a connection between a person who sued the Dassault Corporation over some deal for Mirage 2000 aircraft dating back to about eight to ten year. That gentleman sued the Dassault Corporation because he said he had not been paid an amount which had been promised to him by way of commission. My information is that he lost the case. Now an effort is being made to try and show that he is involved in the Rafale deal also so that even this acquisition is aborted. Are only television channels honest in this country and every one else is rotten to the core?

The process by which we arrive at conclusions is bizarre. There is a perception which we can ignore only at peril that Indian officialdom is corrupt. Let me narrate an incident dating back to 1968, when I was Director, Tribal and Harijan Welfare in Madhya Pradesh. One day my minister summoned me to the Secretariat, about ten kilometers from my office. When I entered his room I found a gentleman sitting there. The minister said that he had some problem and could I sort it out? I took the gentleman to my office where I would attend his case. I had not brought my driver and was driving the official vehicle myself. When we reached the Hamidia Hospital gate the gentleman asked me to stop. I asked him why and he said that we should have a cup of tea and some snacks before proceeding further. I told him that I would give him a cup of tea in my office but I found him still a little uneasy. Suddenly it stuck me what the man must be thinking. I was a sahib because the minister had offered me a chair. At the same time I was driving my own car and there was no attendant with me. This meant that I could not be the bada sahib who naturally would have travelled in style with paraphernalia. Therefore, unless the applicant entertained me I would not give him a proper hearing. This is what people felt about the bureaucracy even in 1968, when actually the bureaucracy was by and large honest and efficient. Today the position is that every single person is convinced that government and its minions are corrupt, despite the fact that there is a substantial number of people who are honest. The tragedy is that this perception of dishonesty is what our media is exploiting to blow things out of proportion.

Let us take the helicopter purchase case. If the aircraft is good let us buy it, but if bribes have been given let us deduct that amount from the payment to be made to Finmeccanica and also impose an equivalent fine. The aircraft acquisition, however, should go on and government out of panic should not negate the entire effort by cancelling the order. Let us have a similar attitude towards all defence requirements, which must be finalised unless there is incontrovertible proof of corruption. Waving sheets of paper before a television audience does not constitute such proof.

General N.C. Vij, former Chief of Army Staff, once told me that the process of weapon acquisition is so tortuous in India that by the time the weapon is received its half life is over. The following time frame for weapon purchase is suggested:-

1. The Service Headquarters submits a proposal to government for acquisition of a certain weapon system, together with full justification, the cost estimate and tentative specification parameters. The process of preparing this proposal should not exceed one year.
2. Examination of the proposal by government and a decision on the acquisition in principle, with a provisional budgetary allocation. The period for this should not exceed six months.
3. Detailed specifications to be finalised by the Service Headquarters, acquisition of prototypes and the testing to destruction under different physical and weather conditions. This process should be completed within two years
4. Stage two technical and administrative estimates and proposals to be submitted by the Service Headquarters to government. The process of decision making in this behalf must be completed within six months.
5. Preparation of tender documents, issue of notice inviting tenders, receipt of tenders and the preparation of a comparative chart by the Service Headquarters, assisted by the Defence Ministry, together with short-listing of providers. This process should not take more six months.
6. Examination of the scrutinised bids and the comparative statement, the short-listed providers of the systems and a final decision on acceptance of the bid by government. This should not take more than six months.
7. Finalisation of whatever documentation is needed for the contract and issue of the work order. This should not exceed six months.

If the above scheduled is followed, then within six years from the proposal having been mooted the inflow of equipment concerned should begin and the whole process should be completed within seven to eight years from start to finish. If this happens our acquisition process would be within the given time frame, there would be no delays and because the process is continuous, the need or the possibility of giving bribes would be substantially reduced. Then people would be encouraged do business with India.

Let us take this whole issue very seriously because if the present trend continues we might as well disarm and disband the armed forces, deploy village kotwals or chowkidars armed with lathis to guard us and practise how to behave like slaves before the new conquerors who would inevitably make us captive. To obviate such an eventuality we need a government which is firm in its resolve and which refuses to be swayed merely because some complaints have been made, we need a machinery for quick investigation of complaints, but we also need a media which is responsible in its behaviour, exercises restraint where it is necessary in our national interest and which at least in defence matters puts the interests of the nation before its own hunger for attention.