2/20/2015

Defenceoffensive|BusinessLine

Defenceoffensive
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SweepingreformsareneededifIndiaistobecomeaglobaldefencemanufacturinghub.Apiecemealapproachwontwork

PrimeMinisterNarendraModihassetatoughchallengeforIndiasdefencemanufacturingsectordoublingits
outputandhalvingdefenceimportsinfiveyears.Withabudgetedexpenditureof2,29,000crorein201415,Indiais
oneofthetoptencountriesintheworldintermsofdefencespends.ChinaspendsthreetimesasmuchasIndiaon
defencebutimportsonlyathirdasmuchasIndia.Although40percentofIndiasdefencespendisonthecapital
account,70percentofthecapitalequipmentitbuysissourcedabroad.ThisiswhyIndiahasemergedasthelargest
armsimporterintheworld,atitlethePrimeMinisterhasrightlysaidithasnodesiretohold.Butchangingthisisnot
easy.Itrequiresnotjustpolicyreforms,butaradicalchangeinapproachonthepartofthegovernment.Piecemeal
efforts,likehikingFDIlimitsindefenceorremovingafewtaxissues,whilewelcome,willnotbesufficient.
Indiasfocushasbeenonindigenisationanddevelopmentoflocalcapability,whichhasledtothecreationofahuge
defenceresearchanddevelopmentinfrastructure.Whilethishasscoredafewsuccesses,aseniorDRDOofficialsclaim
thatIndiahasreachedmaturityindefencetechnologyisbeliedbythestringoffailuresandthehugedelaysandcost
overrunsdoggingkeyprojects,rangingfromtheMainBattleTanktotheLightCombatAircrafttoevensmallarms.
Thisneedsradicalreform,includingcloseintegrationoftheendusersthearmedforceswiththecivilian
developmenteffort.Theseinstitutionshavetobeunshackledandallowedthefreedomtorecruitthebesttalent,while
beingheldtotighteroutcomenorms.WhileModihassaidtheapproachwillbetolookatnationalcapacityrather
thanprivateorpublicsector,theexistingPSUdefencemanufacturingsetupneedstobethoroughlyrevamped.Itsnot
enoughtomerelyinsistontechnologytransferthecapacitytoabsorbanddeveloponithastobebuiltupaswell.
ForeigncompanieslookingtosetupmanufacturinginIndiawouldalsoneedskilledmanpower,whichwouldrequire
revampingourtechnicaleducationsetup.WhenSingaporepitchedforasliceoftheaviationmanufacturingpie,for
instance,itintroducednewcoursesinitstechnicaleducationcurriculumandcreatedanewvocationaltraining
establishmenttoensurethathitechmanufacturerswereabletosourceappropriatelyskilledworkers.
Indiasdefenceprocurementprocessiscumbersome,opaqueandhasbeendoggedbycorruptionandcontroversy.The
PrimeMinisterhaspromisedsimplicity,accountabilityandspeedydecisionmakingindefenceprocurement.Thelast
hasbeenhamperedbywhatAnilAmbanihastermedfearofregulatorycensure,whichhasparalyseddecision
making.Toempowerdecisionmakers,thegovernmentshouldconsideramendingrestrictiveprovisionssuchas
Section13(1)(d)ofthePreventionofCorruptionAct,bywhichapublicservantcanbeaccusedofcorruptionsimply
becauseadecisionhasledtopecuniaryadvantageforsomeone,evenifnobribeshadbeenpaid.
(ThisarticlewaspublishedonFebruary19,2015)
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