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Considering that the defence capital expenditure already accounts for a very high share in the central government’s overall capital spend, any substantial hike in the former’s share looks less likely. This is more so given the government’s priority to spend on infrastructure and other non-defence capital assets to revive the economic growth.
There is a need to evolve a protocol for contract administration and post-contract management of all capital and revenue contracts awarded by various departments of the defence ministry and the armed forces.
Having decided to create the post of CDS, the next logical step for the government is to define its charter of duties and responsibilities. The government needs to examine not just the CDS’s role as a single-point military advisor, but also his role in other matters that are equally important in driving critical defence reforms.
The government’s decision to allow the private sector to undertake the development of complex defence equipment is a step in the right direction. It will help forge a larger innovation system to meet the diverse requirements of national security. However, caution may be required to avoid duplication of efforts and prevent indirect import.
The government seems to have little fiscal space for accommodating the demand of the armed forces for additional funds, given its quantum on the one hand and the state of its revenues on the other which are already quite stressed.
The blueprint for the operationalisation of CDS would require intensive deliberation to make sure that no aspect of its implementation is left unaddressed.
As a corporatised entity, the OFB will be in a far better position to respond to the market dynamics and face the competition effectively.
The agile acquisition or C2D2 model currently under adoption by the US for its F-35 aircraft is likely to become a necessity for acquisitions in future, as disruptive defence technologies will continue to affect military systems across the world.
Even if the Fifteenth Finance Commission manages to make a specific recommendation about the funds to be allocated for defence and internal security and the government accepts the recommendation, there can be no guarantee that the actual allocation will not fall short of the accepted level.
It would be nice to see the defence ministry setting up a task force and submitting actionable recommendations which could be considered by the finance minister while deciding the defence outlay next year.
With the latest Union budget keeping the MoD interim allocation unchanged, the MoD has an uphill task in managing its resources and in funding its modernisation programmes.
Implementing the outlined 27 reform measures in four broad areas – Planning, Defence Budget, Acquisition and Make in India – would strengthen defence preparedness and build a credible defence industrial base.
There is a need to make it clear in the text of Paragraph 72 of DPP 2016 that no vendor other than the Development-cum-Production partner or the nominated Production Agency will be permitted to enter the tendering process at the post prototype development stage.
While the purpose of the Fall Clause, a price safety mechanism in rate contracts, is indubitable, some issues concerning its applicability and implications, both for the buyer and the seller, merit a review.
India needs a comprehensive space security architecture consisting of a dedicated Space Command for operational aspects as well as an exclusive Defence Space Research Agency to focus on scientific and technical aspects.
A dynamic offset policy has to include a mechanism for identifying the causes for likely delay or default on the part of vendors in discharging their obligation and removing the impediments faced by them
Shortage of funds even to service the committed liabilities raises questions about the financial affordability of the defence modernisation programme and viability of the push for ‘Make-in-India’ in defence.
That the AK-203 would be produced in India with 100 per cent indigenous content in less than three years makes it a win-win deal for the Army and the Make in India initiative, with Ordnance Factory Korwa emerging as the biggest winner.
The CAG report relating to the Indian Air Force has highlighted various anomalies and the unprofessional manner in which defence acquisitions are handled.
Defence capability building and capability sustenance have been adversely affected over the past decade because of inadequate allocations and the status quo approach of the Defence Services.
