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The relationship between the cost versus coverage of technology transferred, which likely follows the law of diminishing returns, would make technology acquisition beyond, say 80 per cent, increasingly cost prohibitive, with no matching and assured gains
It is important to restore the functional self-sufficiency of the finance division of a ministry which handles 17-18 per cent of the total central government expenditure so that it could discharge its responsibilities without real or perceived pressures.
The basic challenge for defence economists is to demonstrate that there are other feasible ways of skinning the cat during budget formulation. But the challenge is also inextricably linked with the need for rationalisation of defence expenditure.
There is a strong case for abandoning the present approach of looking at the defence budget through the narrow prism of allocation and utilisation, and instead focus on outcomes.
The objective of asking these question should be to elicit information that generates a well-informed debate on, and facilitates the result-oriented monitoring of, the MoD’s handling of matters related to the defence budget.
On 5 February 2017, a version of the Hawk Advanced Jet Trainer (AJT) was unveiled. The aptly-named “Advanced Hawk” is a joint-venture between BAE Systems and Hindustan Aeronautics Limited (HAL). It has been developed using internal funds on an equal risk basis and offers significant enhancement of the capabilities of the basic Hawk AJT.
There is a plethora of evidence to show that the problem of establishing a Defence Modernisation Fund does not lie with any ‘rules of business’, but instead with its merit and workability.
The share of defence expenditure in 2016-17 has gone below the levels it was in 1955-56. In 2017-18 it will go down to 1.557 per cent of GDP.
Budget is not just all about figures but also a statement of policy. The Defence Budget for 2017-18 contains no hint of any intention of the government to bring about a paradigm shift in the defence policy.
There is a need to go beyond stale issues and have a more meaningful and dispassionate discussion on how to make the best use of the allocations made for defence.
The BEML model of disinvestment needs to be applied to the rest of the Defence Public Sector Undertakings as well as Ordnance Factories.
With some innovative thinking, on-line arrangements with suppliers, including the Canteen Stores Department, could reduce the cost of storage and distribution and, more importantly, help in maintaining a high satisfaction level among troops.
Higher Defence Management, Civil-military relations and force modernisation were three critical areas in which there was little or no movement in the year gone by.
The biggest lesson that India can borrow is France’s integrated and centralised procurement structure, which has the dual responsibility of arms acquisition and defence industrial development.
The Papua New Guinea Defence Force (PNGDF) is preparing to undergo a major expansion programme. India can assist in enhancing and developing PNGDF’s capabilities without coming into conflict or competition with the Australian interests.
Should GRSE and GSL deliver satisfactory services to their export customers, there is considerable potential for India to position itself as a competitive supplier of small and medium warships and patrol crafts.
It is rare that a foreign company makes a huge investment to produce major platforms in a third country with a view to make that country an export hub.
While it may be tempting for the Niti Aayog to make deep inroads into defence planning, it would be wise to focus only on those areas that do not disturb the core function of defence preparedness.
If a product is indigenously designed, developed and manufactured, should the percentage of indigenous content in that product really matter so much?
The Task Force has not extended the principle of Strategic Partnership to the whole gamut of big contracts in which the private sector is supposed to play a major role. And it visualises strategic partners as poor cousins of state-owned entities.
