In view of the security challenges, India should optimise its huge defence expenditure by improving the teeth-to-tail ratio

by G Mohan Kumar

As the new government settles down, with former home minister Rajnath Singh at the helm of defence ministry, it is time for a much-needed overhaul of India’s security apparatus that needs to be driven by a spirit of reform and dismantling of silos to usher in jointness.

In view of the security challenges on the eastern and western borders as well as in the Indian Ocean Region, India should optimise its huge defence expenditure by improving the teeth-to-tail ratio. This can be done by reducing flab and re-balancing expenditure. Such an exercise is in progress based on the recommendations of the Shekatkar committee (2016), targeted mainly at the support wings of the three services. But a deeper reform to bring about convergence among the combat forces is necessary.

THEATRE COMMANDS 

Despite the Kargil Committee’s emphasis on enhancing the jointness of the three services, the only efforts made so far in this regard are the creation of the Integrated Defence Staff at Headquarters, the Andaman Nicobar Command and the Strategic Forces Command where the three services work together. While army chief General Bipin Rawat seeks to integrate the infantry, artillery, armoured personnel and combat engineers at the division level through the concept of ‘integrated battle groups’, this will fall short of complete integration.

The three services, which together have 17 commands, can be integrated if they are organised into three or four ‘theatre commands’, each under a theatre commander. In order to set up theatre commands, which will cut at the root of the established command structure, the appointment of a chief of defence staff (CDS) will be necessary as the CDS has to carry out inter-services coordination and planning rising above service loyalties.

This will reduce the powers of the service chiefs, whose role will be limited to recruitment and training of forces and personnel management. However, there will be significant gains in terms of interoperability, commonality of equipment, economies of scale, seamless coordination and, above all, combat effectiveness. It took the US much time and effort to introduce theatre commands. The Vietnam war and the failure of the Iranian hostage rescue mission of 1980 were the pointers. However, facing stiff resistance from the US armed forces, the US government finally had to enforce it through legislation by enacting the Goldwater-Nicolson Act 1986.

One compelling reason for India to give the idea a fair consideration is China’s radical restructuring of its army into five unified theatre commands By halving its army, China has reduced the imbalance between its army, air force and navy. It has also introduced the Rocket Force to handle its missile defence and a strategic support force in charge of cyberspace and electronic warfare. India needs to take the cue and not lose time in restructuring the forces in operationalising the cyber and space commands. The wars of the future will be entirely technology driven. Intensive application of artificial intelligence and space based assets, cyber warfare and unmanned air warfare, and robotic fighters will be the new norms.

FINANCIAL PLANNING 

The armed forces’ 15-year Long Term Integrated Perspective Plans (LTIPP) – the mainstay of their modernisation programme – remains an ambitious paper exercise without any realistic link to the annual capital allocations. With better jointness the LTIPPs could be reworked and prioritised, but slow acquisitions taking several years and uncertainties in funding can plague rapid modernisation. Budget cuts by the Ministry of Finance (MoF) at the fag end of a financial year are a regular feature. These problems can be overcome only by defining requirements and committing funds.

with a 15-year perspective. It may be necessary to set up a National Defence Acquisition Fund to facilitate this. The parliamentary standing committee on defence had pitched for ‘nonlapsable’ funds but the MoF rejected the proposal on the grounds that it would not only be imprudent but also be violation of Article 266(1) of the Constitution. Provisions of the Constitution and financial norms are alterable but national security requirements are non-negotiable.

REVAMPING DEFENCE PRODUCTION 

India’s unenviable status as one of the largest importers of defence equipment in the world needs to change. Therefore, revamping the defence production system is a critical requirement, even if it means disrupting the deeply entrenched Ordnance Factory Board and the defence public sector undertakings (DPSUs). The ordnance factories’ departmental mode of production is anachronistic, their work culture ruinous and their track record of technology transfer, technology development and quality management dismal. The least that the government can do is corporatise ordnance factories and give the army, the main user agency, a key role in the future management. A large number of products such as ammunition and heavy vehicles could be hived off to the private sector. The decision made in 2016 to engage the private sector in ammunition manufacturing is still entangled in red tape in the MoD. The central government’s shareholding in DPSUs needs to be reduced to 51%, with the rest being held by one or more strategic partners and the public. This will bring in more accountability, better quality, efficiency and productivity. A DPSU like Hindustan Aeronautics Limited (HAL) should be made to work as an integrator by nurturing an extensive ecosystem of small and medium manufacturers. Likewise, the HAL needs to think of outsourcing the manufacture of its helicopters and Tejas partly to the private sector through licensing. The shipyards, on the other hand, have stronger credentials but their track record in technology absorption leaves much to be desired. The four shipyards could be integrated into a single company.

The strategic partnership policy, introduced in 2017, was calculated to harness the potential of the private sector in major defence manufacturing. The framework holds a lot of promise for the defence industry in future acquisitions, but it could sputter if the government panders to public sector pressures in the course of implementation.

PROCUREMENT POLICY 

For the PM’s mantra of ‘Make in India’ to become a reality the procurement system of the MoD has to be revamped and made industry friendly. The MoD had constituted an expert committee in 2016 which submitted comprehensive recommendations for an autonomous procurement organisation under the overall supervision of the Defence Acquisition Council outside the confines of the MoD. It recommended a holistic structure bringing within its ambit product development, utilisation of offsets, promotion of SMEs, Make in India through strategic partnership and a productive relationship with the industry. The new agency was to have core professionals from the fields of finance, law, management, defence, R&D, etc.

The MoD needs to reopen the report, which was hurriedly rejected mainly on the irrational plea that it necessitated creation of new posts, if this fundamental reform is to materialise. 

The author is a former defence secretary