Taking the controversy out of defence deals

The root of the problem lies in a selector who is also a player

It should be baffling to most people. Six years ago, India’s defence ministry approved the purchase of Israeli Barak surface-to-air missiles for the Indian Navy. The navy loves them and swears by them to this day. So why the ugly controversy?

Politics is the first thing that comes to mind—ever since Bofors and especially after ‘Tehelka’, defence procurement scandals have become a perennial favourite with politicians looking to ‘fix’ their opponents. Never mind that these acts of partisanship have ensured that the funds that India has set aside to modernise its armed forces take a long time before getting translated into meaningful hardware. Defence deals are the least transparent of government purchases even in the most transparent countries. That makes them particularly prone to controversy. But the way India’s procurement process is set up makes it even more so.

The fundamental challenge for policymakers has been to balance the need for self-sufficiency in defence production against the immediate needs of the armed forces. But it is not this challenge that is the problem. Neither is it simply a matter of whether DRDO is an incompetent behemoth or not. Rather, it is in the role the DRDO plays in the defence procurement process.

In the current controversy, a key part of the controversy lies in the Defence Ministry choosing the Israeli missiles over DRDO’s objections. Keen to get the Navy to use the Trishul missiles it is developing in-house, the DRDO had institutional interests in promoting its own product. Its interests were very different from that of the end-user, the Indian Navy, which preferred the Barak system. DRDO’s conflict of interest is the root cause of this controversy and indeed in most of India’s defence procurement woes.

There is an urgent need therefore, for the Indian government to rationalise defence procurement, starting with the restructuring of DRDO. Its procurement function must be completely separated from R&D and production units. Unfortunately Prime Minister Manmohan Singh appears to be barking up the wrong tree when he mentioned the need to further regulate the role of middlemen. If the procurement process itself is not reformed, thickening the rule books is unlikely to result in less controversy.

Related Posts: India must nurture private-sector defence suppliers.

4 thoughts on “Taking the controversy out of defence deals”

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  2. What I was amazed is the accusation against Fernandes that he took a cut of Rs.2.00 Crore in the 1500+ Crore deal.

    2 Crore wont even I believe have met the expenses made by the firm for travelling and other expenses incurred by its executives. Also, accusing without providing any proof seems to be the name of the Game nowadays.

    This issue seems to be more of a witch hunt than anything else. Personally feel that Fernandes was one of the best Defense Ministers we ever had, though, it can be argued that people with him werent exactly of the same kind.

    What amazes me even more is the fact that even now, Trishul hasnt been developed while the purchase was done after having a few flop trials of Trishul in 1999. Read in a news report that DRDO is now claiming that Trishul was only a Technology Demonstrator.

    Cheers

  3. I hope this is the final nail in PSUs wastes of resources such as DRDO, HAL etc. They take 2-3 decades to come up with stuff like LCAs, Surface-to-air missiles etc.!

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