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MAKING THE BEST OF DEFENCE BUDGET

Does our politico-military-bureaucratic leadership have the wisdom to grasp the opportunity and overcome the challenge?

LT GEN PR SHANKAR (Retd)

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Economists told me that I was making fundamental sense in my article, “Chinese and Indian Defence Budgets: Comparative Hype and Reality”. People with experience in handling defence budgets said that I presented a very unique perspective. I got a left-handed compliment for creating a positive narrative, even out of a not-so-positive situation. It was pointed out that urgent capability development needs, clearing backlog of AONs, carry over liabilities, etc, have not been met. That is exactly the point I was making when I ended the article by stating: “It is not as much about the budget allocation for defence, but it is more about how we spend it. We are not getting the bang for the buck. The window of opportunity is there now due to our projected growth rates…Such windows will open very rarely. In our case, it opened once earlier at the turn of the century. We looked the gift horse in its mouth to squander it. It is appearing again now. It should not be a case that a fool and his money are soon parted.” Let me take things further. 

THE CAUTION 

Everyone knows that the Chinese system is opaque and corrupt. However, the corrupt Chinese system which spends only 1.87 times our defence budget embarks on a long-term programme to build 10 aircraft carriers, nuclear submarines, stealth fighters and effect complete mechanisation by 2025. In future, the expenditure ratio will reduce to 1.42 times. (see tables below). On the other hand, despite such relatively large expenditure, India does not dare to dream of the third aircraft carrier. There is only one answer. We have been more corrupt than the Chinese, or more inefficient or both. This multiple whammy over years, has left us with a huge capacity deficit vis a vis China. The necessity to reform and rectify the situation is universally acknowledged. However, our reforms are as pedantic as malignant cancer being left unattended. 

While it was great news that India’s arms import dropped by 33%, there is a dark cloud over the thin silver lining. As per SIPRI, “The overall drop in India’s arms imports between 2011–15 and 2016–20 seems to be mainly due to its complex and lengthy procurement processes, combined with its attempts to reduce its dependence on Russian arms by diversifying its network of arms suppliers. As India perceives increasing threats from Pakistan and China and as its ambitious plans to produce its own major arms have been significantly delayed, it is planning large-scale programmes for arms imports. Based on its outstanding deliveries of combat aircraft, air defence systems, ships and submarines, India’s arms imports are expected to increase over the coming five years”. Tells us a lot. 

THE OPPORTUNITY 

Notwithstanding the caution I have sounded, If India allows its defence budget to grow with its GDP without limiting it by value, then the opportunities are as under:

The trend-line of reducing defence imports, if sustained, will enables us to cap imports in the next 5-year period as factored in the tables above. More importantly, if our defence export regime is reformed and  streamlined, we could be ‘value neutral’ in the next five – ten years.   

Our defence budget can potentially grow from $70billion to $billiom. That is a 50 % increase. Over a five year period we could be spending an accumulated  90 bn USD more on defence. If our manpower and import costs remain capped, then all this expenditure will go into capability enhancement.

If the current trend of expanding private participation in defence production / acquisition continues, then the Indian Defence Industry is in for a sunshine period. 

This significant bump in defence budget (potentially) can kick start a Civil Military Fusion cycle which is a sore necessity. 

Here are some ideas for change and realising the opportunity.  

APPLE AGGREGATION MODEL 

I understand  that for every Apple smartphone sold , the revenue share of Apple Inc is 60- 65%, Japanese and South Korean  component suppliers get 25 – 30 %  and Chinese factories get 5-10%. Additionally, the investment is completely done by Chinese, Japanese and Korean companies! They, in turn,  garner funds from the market. Overall Apple earns without any investment. However, it makes long term commitments to its manufacturing base, has a huge turn over and still comes up with new models through latest design and inventiveness to stay ahead of the loop. This ‘Apple Aggregation Model’ based on intellectual capital can be adopted in acquisition of indigenous weapon systems. Economy of scale through long term forecasts, aggregation and adopting market principles will pay handsome dividends. Scope for such a system exists in Artillery. It can be adopted elsewhere. It needs imagination to think differently. The government must wield an axe to cut through ‘life threatening bureaucratic thinking’. Procrastination in reform has resulted in, budget overruns, wasteful expenditure and suboptimal capability.

AATMANIRBHARTA 

Aatmanirbharta in defence is critical. It should go beyond the restricted / negative import lists. In fact, it has been one year since the list has been published. What are the outcomes? What next? Is an expanded list on the anvil? There is great scope for import substitution in the revenue stream also. The MGO and logistics branches of all Services, need to get together and establish import substitution portals where MSMEs can participate extensively. The largely ineffective, Department of Indigenisation needs energisation. Import substitution and indigenisation should progress on a benchmarked road map. Another important part of Aatmanirbharta is to achieve technology self-sufficiency. I understand that there is a move to indigenise processor technology at national level. This must be extended to other technologies related to AI, special material, GIS, surveillance and so on. There is a strong case for a defence technology mission through Start-ups. 

CIVIL MILITARY FUSION 

India must embark on a Civil Military Fusion as an extension to Aatmanirbharta,. All great nations have done it. USA did it in the last century. Presently, China is doing it in a big way, often adopting illegal and questionable methods. The US and Chinese models can be studied and adopted to our conditions based on our requirements and strengths. At the heart of it, Civil Military Fusion is all about dual use technologies and exploiting their civil use for military purposes and vice versa. The main focuses must be disruptive technologies like quantum computing, AI, big data, semiconductors, 5G, advanced nuclear technology, aerospace technology, new materials, energy, communication, and nuclear power. The vision and approach have to be beyond MoD as part of national interdisciplinary missions. We have the talent but are unable to harness it. Microsoft and Google are better at harnessing our talent and selling back to us! We need to learn from them.  

DEFENCE EXPORTS 

The fact that 71% of Bangladeshi arms imports come from China tells a tale of our defence exports. Knowledgeable people in the industry and government feel that the intent is strong but the methodology of export is weak. If defence exports have to bump up to 5 billion USD, India needs more professionalism than bureaucracy. I have dwelt extensively on this in my article last year @    https://www.gunnersshot.com/2020/09/a-landscape-for-defence-exports-by-lt.html. There is a requirement for a capability and requirement analysis based on an incentivised export architecture. This needs to plug in with our military and diplomatic framework. Defence exports need not be only about big ticket items it could be spares, MRO and services also. It should encompass public and private sector. Most importantly it should function at arm’s length from the MOD. 

MANPOWER 

Manpower is a festering sore. The need to be more platform centric rather than manpower centric is well known. Everyone knows that the simple act of lateral transfer of defence personnel to paramilitary forces after their terms of engagement with the armed forces or transfer of RR battalions to home ministry will result in huge savings. Yet the political will to tread this route is missing. Our politicians seem to be baulking at this low hanging fruit. Vested interests within the system are hijacking the issue. It is  national profligacy to send fully trained personnel on pension when they can be utilised for another two decades as paramilitary forces. Take another facet. Public sector defence industry is over staffed, inefficient, produces low quality  and is costlier than imports. Yet we do not carry out internal reform. Corporatisation of OFB seems to have bitten the dust. If  OFB cannot be corporatised do not give them orders and stop recruitment. Dry them out. The Services must evolve a road map for alternate procurement from private industry through open competition. The Armed Forces need to be more vocal about it. I did not see such issues being highlighted in the Combined Commanders Conferences. If the other departments can nudge the political leadership, why cannot the Armed Forces do so? The CDS needs a hard look at all these issues.

SPENDING INABILITY OF ‘MUNSHIJI’

Our ability to enhance capacity is also crippled by an inability to spend. It is often published with much fanfare that financial powers have been delegated to VCOAS / DCOAS. How has this ‘delegated powers’ mechanism functioned? What are the results of delegation? Why has it not worked? How to make it work better? Is it just a mechanism to shift blame to services or is it shifting failure down the line? Look at any old time Hindi movie. The real villain is often the ‘Munshiji’. He always stays in the background, instigates the villain, stutters shifty eyed, manipulates, schemes and tricks the ‘hero’ into a ‘zero’! To quote an example. How does the Defence Finance explain a 100% cost inflation in a product when produced indigenously as against a 10-12% cost inflation in a similar product when imported in the same time period. Our defence finance specialists pass such inflated costs routinely. The defence finance has to be populated by defence professionals and not ‘Munshijis’. I can quote and embarrass people in this regard but will refrain from doing so for the present. This is one cancerous lot which has escaped scrutiny. Needs REFORM!

THE CHALLENGE 

In the past year I have been one of the staunchest of supporters of our Armed Forces and the defence establishment—Right or Wrong. At a point of crisis there was no other way. However even a person totally unacquainted with the principles of our defence economy will agree that over a period of time, dishonest politicians, self-serving bureaucrats and a largely ignorant and insulated Armed Forces have deprived this nation of the security it deserves. This is despite the fact the regular tax payers have paid through their noses for security. Our politico-bureaucratic-military leadership has consistently under performed. However, that is in the past. The ‘challenge’ now is that do we have the intellectual honesty, to rectify the situation for the future?  If the government wants India to be strategically independent, then it is time to walk the talk. 

The armed forces have come to a point where they could cope with our enemies with what they had up till now. In an era of multi-domain warfare they need capabilities which are over the horizon. Their well of capabilities is drying. To acquire futuristic capabilities, we need to grasp the moment. Otherwise we will remain where we are – never respected, never to realise our dreams but always to make big promises of our  un utilised potential.   

Does our politico-military-bureaucratic leadership have the wisdom to grasp the opportunity and overcome the challenge? History will judge people of today whether they have been able to grasp the opportunity or squandered it by talking big.

Lt Gen P.R. Shankar was India’s DG Artillery. He is highly decorated and qualified with vast operational experience. He contributed significantly to the modernisation and indigenisation of Artillery. He is now a Professor in the Aerospace Dept of IIT Madras and is involved in applied research for defence technology. His other articles can be read on www.gunnersshot.com.

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Defence

INDIA REPATRIATES YOUTH FROM POK AT TITHWAL CROSSING POINT

Ashish Singh

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On the night of 5th April, a youth inadvertently crossed the line of control into Karnah, Kupwara (J&K). The youth identified as Mausam son of Manzoor Ahmad from Lipa area of Kashmir under illegal occupation of Pakistan was kept by the Indian troops deployed along the line of control for the night with due care & Pakistani authorities were informed of the whereabouts of the child. Based on the interaction between the authorities of both sides on the hotline, the Indian authorities repatriated the youth to the Pakistani authorities from Tithwal crossing point as a humanitarian gesture. The youth was presented clothes and sweets, on return. On the occasion of repatriation, the representatives of civil administration, Karnah were present. The exchange took place at 1150 a.m. Indian standard Time on 7th April. Such inadvertent crossings have taken place earlier also due to close proximity of villages along line of control on either sides. However, the Indian side has always been prompt in returning the individuals keeping the humanitarian issue in mind.

That way Tithwal Crossing Bridge located on Kishanganga river has been acting as a point of peace between the two sides. It would be pertinent to highlight that the site is visited by lots of people from either sides and is emerging as tourist site especially after the recently agreed ceasefire between India and Pakistan. The peace and tranquility as a result of the agreement, is being appreciated by the civil population on either sides of line of control.

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Defence

RAJNATH SINGH HOLDS BILATERAL TALKS WITH KAZAKH DEFENCE MINISTER

Discusses ways to further strengthen bilateral defence cooperation.

Ashish Singh

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Defence Minister Rajnath Singh held bilateral talks with Defence Minister of Republic of Kazakhstan Lieutenant General Nurlan Yermekbayev in New Delhi on Friday. During the meeting, the two Ministers exchanged views to further strengthen bilateral defence cooperation, including through training, defence exercises and capacity building. They agreed that both sides must look at the possibility of defence industrial collaboration of mutual interest. The Defence Minister of Kazakhstan thanked Rajnath Singh for the opportunity given to the Kazakh troops for deployment as part of the Indian battalion in United Nations Interim Force in Lebanon (UNIFIL). Both Ministers also positively assessed the annual KAZIND Exercise.

Chief of Defence Staff General Bipin Rawat, Chief of Naval Staff Admiral Karambir Singh, Defence Secretary Dr Ajay Kumar, Secretary (Defence Production) Raj Kumar and other senior civil and military officials of Ministry of Defence were also present on the occasion. Lieutenant General Nurlan Yermekbayev is on an official visit to India from April 7th to 10th. He visited HQs 12 Corps at Jodhpur and the Longewala sector in Jaisalmer. The Kazakh Defence Minister is in India on the invitation of Rajnath Singh.

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Defence

MADE IN CHINA: NOT IN A BATTLE PLEASE

Ashish Singh

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The recent conflict between Armenia and Azerbaijan in Nagorno Karabakh is being avidly studied in think tanks and military academies over the world for its unusual lessons and the optimisation of disruptive technologies, particularly the success of Azerbaijan’s drones. However, another set of people are quietly studying the conflict even more closely—the global arms industry. Every conflict spurs arms sales. After the overwhelming and quick success of the US-led forces in Gulf War I, there was a long lineup for the latest weapons used in the war. The Saudis wanted F-15 fighters, Apache helicopters, Abrams M1A1 tanks, AWACS radar planes, Patriot missiles, multiple-launch rocket systems, Seahawk helicopters, and Bradley fighting vehicles. The Egyptians wanted Hawk missiles, M-60 tank upgrades, and F-16 fighters, while the Israelis negotiated for portable battlefield-navigation systems, upgrades for the F-15 fighter and the M-109 artillery piece, and more Patriot missiles. A similar interest in the weapon systems, particularly drones, deployed in this conflict is being shown today in cash-rich capitals of many nations.

However, nobody is taking the next flight to Beijing to close an arms deal, though the Chinese have a reputation for being the cheapest in the market. The reason is evident, but hushed. For all their claims of technological prowess, the Chinese systems have failed to deliver. China commenced with large scale sales of drones to many countries as early as 2011. It was a ‘supply shock’, and countries like Pakistan, Iraq, Egypt, Saudi Arabia and Algeria obtained them. The prices were unbelievably low—both for unmanned aerial vehicles (UAVs) and unmanned combat aerial vehicles (UCAVs). However, the performance of these inexpensive platforms leaves a lot to be desired. The export versions are regularly falling out of the sky. Algeria has reported a series of accidents in the last six years with the Chinese-supplied CH-4 UCAVs. The CH-4 is produced by China Aerospace Science and Technology Corporation. It is one of the Rainbow series of aircraft built by the state-owned corporation. In Algeria, repeated crashes of CH-4 were reported near Tindouf, Bir Rogaa and Ain Oussera airbases.

Jordan had to put on sale Chinese-supplied UAVs after they failed on all parameters. After purchasing with much fanfare in 2016, within three years, the Royal Jordanian Air Force (RJAF) had put its Chinese-made six CH-4B UAVs up for sale in June 2019, indicating disappointment with their performance. The RJAF had acquired them in 2016 along with AR-1 laser-guided missiles and FT-9 guided bombs. In June 2020, a Chinese drone crashed in Cambodia, in Koh Kong province’s Kiri Sakor district. It was a Chinese BZK-005, a high altitude UAV used primarily as a long range reconnaissance aircraft, designed by Beijing University of Aeronautics & Astronautics and Harbin Aircraft Industry Company. Within China, their much hyped ‘Predator’ unmanned helicopter developed by Hangzhou Star Low Altitude Helicopter Development Company and hailed as one of the “trailblazers” in the development of China’s drone industry suddenly dived towards the ground and crashed at air show in Hangzhou in October 2020.

The key Chinese system in the Nagorno Karabakh conflict was the WM-80 Multiple Rocket Launcher (MRL), sold to Armenia in 1999 with great promises of devastating fires and annihilation of enemy forces. The MRL system was developed by Norinco, the China Ordnance Industries Group Corporation Limited, on Chinese designed Type 83 273 mm. It has a modular design, with two launcher boxes each containing four ready-to-launch rocket rounds on a TAS-5380 8×8 truck chassis. It failed to make any impact on the opposing Azerbaijan forces. In short, the Chinese weapon platforms have proved undependable even in mildly contested environments, leave aside wars with dense and unpredictable Air Defence environment.

There are numerous reliability and supplies issues with China. China signs agreements for a certain variant of a weapon platform but delivers a lower version with many changes. Often the buyer has no choice but to accept since the requirements are urgent, as in case of Algeria who purchased the lower variant as their border situation was worsening with Libya, Mali and Niger. Pakistan has similar compulsions, not to mention a worsening economy. China is also known to avoid providing spare parts and after sales service. Reports indicate that instead of adhering to the original contract, Chinese middlemen keep putting forth new options for better platforms, and make sales pitch simultaneously to rival factions and groups, particularly in Africa. Maybe the Chinese will improve their weapon platforms in near future, and offer some quality along with quantity. Even without quality, there would always be some buyers from the cash-strapped regions. However, for anywhere else where ethics and human lives matter, no ‘Made in China’ crashing drones and dysfunctional systems in a battlefield.

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Defence

INDIA, MALDIVES CALL FOR GLOBAL COOPERATION AGAINST TERRORISM

First meeting of India-Maldives Joint Working Group on Counter Terrorism; the two nations strongly condemned terrorism in all its forms.

Ashish Singh

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The first meeting of the Joint Working Group on counter-terrorism, countering violent extremism and de-radicalisation between India and the Maldives was held in New Delhi on Thursday. The Indian side was led by Secretary (West), Ministry of External Affairs, Vikas Swarup, and the Maldivian side was led by Foreign Secretary Abdul Ghafoor Mohamed. The meeting was held in a cordial and constructive atmosphere that symbolises the time-tested and good neighbourly ties between India and the Maldives and the energy, ambition and scale acquired by our bilateral relations under the leadership of Prime Minister Narendra Modi and President Ibrahim Mohamed Solih.

India and the Maldives strongly condemned terrorism in all its forms and manifestations including cross-border terrorism and emphasised the need for strengthening international cooperation to combat terrorism in a comprehensive and sustained manner. Both sides reviewed threats posed by terrorist entities that are under UN sanctions and emphasised the need for concerted action against all terrorist networks.

They underlined the urgent need for all countries to take immediate, sustained, verifiable and irreversible action to ensure that no territory under their control is used for terrorist attacks on others and to expeditiously bring to justice the perpetrators of such attacks. Referring to the joint statement issued during the state visit of Prime Minister Modi to the Maldives in June 2019, the two sides recognized the critical threats that terrorism, violent extremism and radicalisation pose to peace and security in the region.

India appreciated the clear-eyed stance taken by the Government of President Solih to counter such threats and the concrete steps taken by the Maldives in this regard. The two sides also exchanged views on various areas of cooperation in the sphere of counter-terrorism including countering radicalization and violent extremism, combating financing of terrorism, preventing exploitation of the internet for terrorism and violent extremism, information sharing, capacity building and establishing institutional linkages between police, security forces, Customs, Immigration and other relevant agencies.

Further, the two sides exchanged views on enhancing bilateral cooperation against narcotics and drug trafficking. The discussions were also informed by the challenges that the Covid-19 pandemic has presented to countering terrorism, radicalisation and violent extremism.

Both sides agreed to strengthen cooperation that will include assistance and capacity building for the security and law enforcement agencies and other relevant agencies of the Maldives as well as collaboration and the exchange of best practices in the areas of counter-terrorism, preventing and countering of violent extremism and de-radicalisation. The two sides also discussed cooperation in multilateral fora. The Maldivian delegation will also visit the training facilities of National Security Guard and the Bureau of Police Research and Development during its stay in New Delhi.

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Defence

Indian Army Chief Naravane proceeds on a five-day visit to Bangladesh

Ashish Singh

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Continuing with the excellent tradition of strong bilateral and defence ties between India and Bangladesh, General M.M. Naravane, Chief of the Army Staff (COAS) has started a five day visit to Bangladesh from 8th to 12th April. General Naravane’s visit comes in the midst of Swarnim Vijay Varsh celebrations which mark 50 years of the liberation of Bangladesh, made possible by the historic leadership of the Bôngobondhu Sheikh Mujibur Rahman and heroics of the Mukti Bahini who fought shoulder to shoulder with Indian Armed Forces. 

The Army Chief paid tributes to the martyrs of the Liberation War by laying a wreath at the Shikha Anirban on Thursday. This was followed by one to one meetings with the three Service Chiefs of the Bangladesh’s Armed Forces. General Naravane is also scheduled to visit the Father of the Nation Bangabandhu Sheikh Mujibur Rahman Memorial Museum in Dhanmondi, where he will pay tributes to Bangladesh’s founding father. The COAS will interact with Bangladesh’s Minister of Foreign Affairs on 11th April at Bangladesh Army’s Multipurpose Complex in Dhaka where he will attend a seminar on UN Peace Support Operations and deliver a keynote address on “Changing Nature of Global Conflicts: Role of UN Peacekeepers”

General MM Naravane is also scheduled to interact with the Force Commanders of the United Nations Missions in Mali, South Sudan and Central African Republic and the Deputy Chief Operations Officer of the Royal Bhutanese Army on 12th April. He will also attend the closing ceremony of Exercise Shantir Ogrosena, a multilateral UN-mandated counterterrorism exercise comprising the Armed Forces of India, Bangladesh, Bhutan and Sri Lanka along with observers from the US, UK, Turkey and the Kingdom of Saudi Arabia among others. The Chief will also witness the innovations of the Bangladeshi Armed Forces personnel during the Hardware Display. The Chief of the Army Staff will interact with the members of Bangladesh Institute of Peace Support and Training Operations (BIPSOT) during the last leg of his visit. This visit will further deepen the bilateral relationships between the two Armies and act as a catalyst for closer coordination and cooperation between the two countries on a host of strategic issues.

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Defence

Kazakhstan Defence Minister visits India for bilateral talks

Ashish Singh

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Minister of Defence of Republic of Kazakhstan Lieutenant General Nurlan Yermekbayev is on an official visit to India from April 7th to 10th. The Kazakh Defence Minister arrived in Jodhpur on Wednesday and is scheduled to travel to Jaisalmer, New Delhi and Agra for meetings and visit to defence establishments. Lieutenant General Nurlan Yermekbayev will hold a bilateral meeting with Raksha Mantri Rajnath Singh in New Delhi today. This will be the first meeting after Lieutenant General Nurlan Yermekbayev was re-appointed as Defence Minister of Kazakhstan. The two Ministers had last met in Moscow on 5th September 2020 on the sidelines of Shanghai Cooperation Organisation (SCO) Defence Ministers’ meeting. The Kazakh Defence Minister is in India on the invitation of Raksha Mantri.

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