Reforming India’s Defence Acquisition Structure and Procedures

Chairperson: Shri N S Sisodia
Discussants: Shri V K Misra, Shri Amit Cowshish and Shri Ranjan Kumar Ghose

Laxman Kumar Behera’s paper examines the structural and procedural weaknesses afflicting India’s defence acquisition system. In particular the paper focuses on three issues: acquisition planning, ii) accountability in acquisition, and iii) formulation of features of weapons system. According to Behera these three crucial factors have received least or half-hearted reforms. In the paper, he argues that for expeditious acquisition, the Ministry of Defence (MoD) needs to overcome these weaknesses.

In his presentation, he began with the Bofors controversy that according to him set the foundation of India’s defence acquisition system which was again got the boost by the recommendations of the Group of Ministers (GoM) and subsequent procedural reforms. He was of the view that the Bofors controversy was a watershed in the India’s procurement history not because it had significant political cost to the then Central government, but because it stimulated a massive public debate on defence acquisition issues. The Joint Parliamentary Committee (JPC), which was instituted by the government under the Chairmanship of B Shankaranand, did an extensive inquiry into the then Army’s existing procedures for procurement and key decisions involved in Bofors purchase. Behera said that although the JPC did not point out any serious deviations from then existing procedures followed by the Army and other stake-holders, it nonetheless brought into open several practices which were prone to subjective interpretations, and subsequent charges and counter charges. One such practice was the non-requirement of formulation of General Staff Qualitative Requirements (GSQRs) for the weapons procured from abroad.

Mr Behera noted that following the recommendations of the GoM, which was set up to review the national security in its entirety and the recommendations of the Kargil Review Committee (KRC) in particular, the government initiated the process which led to the creation of present procurement organisation, consisting of five main bodies such as i) Defence Acquisition Council (DAC), ii) Defence Procurement Board (DPB), iii) Defence Production Board, iv) Defence Research and Development Board, and v) Acquisition Wing. With the setting up of defence procurement organisation, the MoD has also undertaken periodic review of the procurement procedures. Till now the MoD has carried out six rounds of major revisions, with the Defence Procurement Procedures DPP-2011(DPP-2011) being the latest in the series. He held that the changes in the DPPs have created a streamlined system that is now much more methodical, objective and process-oriented.

Behera argued that despite MoD’s reform measures undertaken so far, the acquisition process has not moved at the desired pace. This is evident from repeated surrender of funds under the capital head of defence budget, much of which is accounted for under the modernisation/acquisition head meant for procurement of ‘big-ticket’ items such as tanks, fighter, submarines, frigates, radars and missiles among others. Moreover, the delays and cost-over run is also a matter of concern to national security, especially when India’s adversaries are acquiring capability at a faster pace.

In the presence dispensation, Mr Behera pointed out that the acquisition planning is a major handicap. The GoM’s idea behind creation of the Chief of Defence Staff (CDS) for a strong planning mechanism has been diluted in the set up of HQ IDS, which is constrained to force itself in articulating a truly integrated perspective plan for the three services, with due diligence towards capability development through inter-and intra-Service prioritisation, matching defence plan with available resources and hand-holding of domestic defence industry. Because of its lack of authority vis-à-vis COSC and due to the superiority of services chiefs over the CISC, the defence planning is constrained. The long term plan is also constrained in the absence of the resource commitment by the government. He said that in order to move towards a truly integrated perspective plan the creation of CDS is vital.

The paper argued that Qualitative Requirement (QR) formulation is concerned, which is the most vital part of the acquisition cycle, has not given required attention through out DPP’s nearly two-decades of operational history. The vital element is continues to be performed by Services personnel who are not trained to so such a specialised job..Moreover, the oversight of the vital part of acquisition is not so strong enough. Given the vitality of a QR in choosing the most cost-efficient selection in a time-bound manner, it is necessary that the job be performed by specialised body, preferably by an external agency. Given that the HQ IDS is tri-service body it would seem most logical that the function is transferred to it. However, the efficacy of HQ IDS would comeby its strong positioning vis-à-vis Services, which would come by putting a CDS as head its head.

Behera noted that contrary to the GoM’s recommendation for creation of “a separate and dedicated institutional structure to undertake the entire gamut of procurement function” what has been created is an Acquisition Wing which performs a part of acquisition functions. Several crucial functions having a strong bearing upon the cost and timeliness of procurement are being carried out beyond its command and control, thereby robbing the system of benefits of the single point of accountability. He pointed out that the organisational shortcoming in accountability has also not been compensated by the procedural means, both because of the professional shortcomings of acquisition functionaries and the lack of courage of the system to own up responsibility in cases which run into oversight problems. He stressed that given the importance of single-point accountability in the vital aspects of weapon procurement, it would be logical, as pointed out by GoM, to move towards an integrated procurement organisation.

Major Points of Discussion and Suggestions:

• Cabinet Committee on Security (CCS) should be the principal authority for approval of acquisition plan of the services.
• The paper needs to define acquisition and differentiate it from procurement.
• There is misconception that the MoD is not utilising the money allocated to it. However, in recently years, the inability to spend money has changed. Now, it has even over-spent money allocated to it.
• So far as the 11th defence plan is concerned, there has been a marked improvements compared to previous plans. It is wrong not to cite in the paper the improvements in this regard.
• The level of infrastructure development in the country, R&D, and capacity building also need greater attention. In addition, there is need of a Defence Planning Board for the defence acquisition.
• The institutional structures further needs to be strengthened for better defence acquisition.
• It is not fair to compare India’s system with Pakistan’s acquisition system.
• The scholar rather needs to focus on how to strengthen the present structure and procedure of defence acquisition system.
• India is more dependent on Russian even for the maintenance of defence equipments. This should be changed in its present defence acquisition system.
• The present acquisition system is good but it needs further to be strengthened by way of more manpower.
• The Bofors case needs to be put in the right perspective; otherwise a wrong conclusion would be drawn.
• If one takes a comprehensive view of the defence acquisition system in recent years, things have improved very much.

Report prepared by Dr Saroj Bishoyi, Research Assistant, IDSA